Insurance – IFRS 9 deferral for insurers

Insurance – IFRS 9 deferral for insurers

This IFRS newsletter brings you the latest on the IASB’s insurance project.


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We examine the latest developments and what the discussions could mean for you.

A number of decisions have been reached on the IASB’s planned response to the differing effective dates of the forthcoming insurance contracts standard and IFRS 9 Financial Instruments.

Many decisions were also reached on participating contracts. The Board focused on:

  • disaggregating changes in participating contracts caused by changes in market variables; and
  • addressing accounting mismatches arising from hedging activities for direct participating contracts.

For more detail on these discussions, read Issue 48 of our IFRS Newsletter: Insurance. Previous issues can be found on our Newsletters web page.

Differing effective dates

At its September meeting, the Board agreed to propose an optional deferral of the IFRS 9 effective date at the reporting entity level for companies whose predominant activity is issuing contracts in the scope of IFRS 4 Insurance Contracts.


“The Board’s decision to permit a deferral of IFRS 9 increases the pressure to bring an end to the insurance contracts project.”


Such companies would be able to defer application of IFRS 9 no later than reporting periods beginning on or after 1 January 2021.

Before and after this date, any company issuing contracts in the scope of IFRS 4 could apply the ‘overlay approach’ – which would consist of interim amendments to IFRS 4 – in conjunction with IFRS 9, if the forthcoming insurance contracts standard is not yet effective.

The Board also reached a number of other decisions on the overlay approach in September. It will seek feedback on the deferral and overlay approaches later this year.

Participating contracts

The Board analysed its earlier decisions on non-participating contracts, and tailored them to participating contracts.

It reached a number of decisions on disaggregating changes in the measurements of participating contracts caused by changes in market variables.

The Board also reached a decision to address the accounting mismatches that could arise when a company:

  • uses a variable fee approach to account for contracts that have embedded guarantees; and
  • hedges itself against risks from those guarantees using derivatives.

Expected timeline

The Board has now completed most of its redeliberations. The remainder, which include evaluating the differences between the general model and the variable fee approach, and the presentation and disclosure requirements, are expected to be completed soon.

An effective date will not be discussed until all other redeliberations have been completed. The Board expects to issue the forthcoming insurance contracts standard in 2016.

Visit our IFRS – Insurance hot topics page for the latest developments in the insurance contracts project.

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