European Insurance: General (19 September 2016)

OAC Digest
Accounting standards, EU / European Parliament / EIOPA

19 September 2016

Selected recent European Insurance news items of more general interest: 

On 14 September, the European Parliament voted to reject the PRIIPS regulatory technical standards. This was covered in a recent OAC news item.

On 12 September, the International Accounting Standards Board issued amendments to its existing insurance contracts Standard, IFRS 4. The issue is that the new IFRS 9 which deals with accounting for financial instruments was due to come into force in 2018 and the new IFRS 4 Phase 2 which deals with accounting for insurance companies will not be ready by then.  Effectively this proposal gives two possible workarounds. The overlay approach is to take the extra volatility caused by the change into "other income" rather than "profit and loss". The other option (the deferral approach) will allow insurance companies to defer implementation of IFRS9 until 2021 and clearly the intention is that IFRS 4 Phase 2 will be operational by then so that the two standards can be implemented together. IFRS 4 Phase 2 will be renamed IFRS 17 and is expected to be adopted into UK GAAP as well eventually. 

David Gray

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David Gray
Consultant Actuary

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