With the consultations complete on the IFRS insurance contracts exposure draft, the IASB has brought the publication of an IFRS closer to realization. But critical decisions remain to be addressed.
“Regulators will be increasingly involved in monitoring the decisions of the Board of directors and how well these align with the risk appetite and risk culture of the company; some may not be prepared for the intense scrutiny this will involve.”
While the IASB consultation on the Insurance Contract exposure draft may be over, the sector still faces several unanswered questions. Specifically:
The IASB has addressed many insurers’ concerns. Allowing the presentation of volatility resulting from short-term interest rate fluctuations in OCI may be more consistent with the insurers’ long-term business model and makes concessions to analysts who want to project long-term distributable profits.
From our perspective, the critical areas within the current proposals and related impacts include:
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