Nine national and regional insurance industry bodies from
Europe, Canada, Korea, New Zealand, Australia and South Africa
want the International Accounting Standards Board (IASB) to
amend and delay its "IFRS 17" book-keeping rule by two years to
Twenty years in the making, the rule seeks to make it easier for
investors to compare how much insurers earn from policies by
prising open a "black box" of opaque national practices. IASB
rules are used in over 100 countries, though the United States
has its own accounting standards.
The industry bodies said in a letter to the IASB that
preparatory work has confirmed that a number of important issues
need to be resolved to make the new rule practical.
"As a result, we strongly believe a two-year delay in the
effective date of the standard is required," the letter to IASB
chair Hans Hoogervorst said.
"There is no expectation that a delay will result in insurers
stopping or slowing their implementation project."
The CFO Forum of chief financial officers from major European
insurers like Allianz, Aviva, Generali and Axa has said the new
rule leads to inconsistent reporting, and requirements that are
Implementation costs range from 50 million euros to 320 million
euros per CFO Forum member, it said, with ongoing operational
costs expected to be significantly greater than for applying
existing insurance book-keeping rules.
The IASB board will discuss staff reports about a potential
delay and amendments next week, but no decision is expected at
"In determining what amendments, if any, to make to IFRS 17, the
board will need to balance the potential benefit of any
amendments against the effect of an undue delay to a standard
that is needed to address many inadequacies in the existing wide
range of insurance accounting practices," an IASB staff paper
for the meeting said.
(Reporting by Huw Jones; Editing by Jan Harvey)
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