6 Dec 2019

IFRS 17 Update

As expected IFRS 17 continues to be an area of continuing discussion.

The IASB met on 20 Nov to consider feedback received on the Exposure Draft (ED) which was issued in June 2019.  The discussion revolved around the feedback on the ED as well as additional comment letters received.

The intent at the next meetings through February 2020 is to confirm certain amendments ( that formed part of the ED) as well as pick up further discussions on additional topics.  That being said, the IASB does not intend any such further discussions on additional topics to further delay the implementation date. Plans remain on track to finalise the standard by mid of 2020.

The meeting on 20 November also made it clear for certain areas that will not be considered further.   For areas where the IASB has made it clear that there will be no further deliberation insurers should press ahead as the related uncertainty has been removed. 

The following 6 areas are expected to be confirmed at future meetings.

  • Scope exclusions for loan as per the ED
  • CSM attributable to investment services – coverage units for contracts with direct participation features
  • Presentation of contract assets and liabilities at a portfolio level instead of at a group level
  • Application of risk mitigation option for reinsurance contracts held
  • Transition relief for contracts acquired in a business combination (pre IFRS 17 transition)
  • Transition relief for the risk mitigation option – application from date of transition and option to apply FV approach


The following 14 areas will no longer be considered further.

  • Mutual entities issuing insurance contracts
  • Classification of insurance contracts acquired in a business combination at date of such transaction
  • Application of VFA for reinsurance contracts held and issued
  • Presentation of premiums receivable and claims payable
  • Comments that entities need not provide comparative information on initial application of the standard
  • Cash flows within reinsurance contract boundary held
  • Subjectivity in determining discount rate and non-financial risk adjustment
  • Non-financial risk adjustment in a consolidated group of entities
  • Discount rate used to determine CSM adjustments
  • Other comprehensive income option for insurance finance income or expenses
  • Level of aggregation for insurance contracts - other than those with intergenerational sharing of risks between policyholders
  • Transition – reliefs in full retrospective approach
  • Transition – general optionality and flexibility in the modified retrospective approach
  • Application of risk mitigation approach for contracts without direct participation features


The following areas are also expected to be discussed at future meetings.

  • Proposed scope exclusion for credit cards
  • Proposed amendment for expected recovery of insurance acquisition cash flows
  • Proposed amendment for contractual service margin attributable to investment services – coverage units for insurance contracts without direct participation features, disclosures and terminology.
  • Proposed amendment for reinsurance contracts held – recovery of losses.
  • Applicability of the risk mitigation option – non-derivative financial instruments at fair value through profit or loss
  • Level of aggregation for insurance contracts - those with intergenerational sharing of risks between policyholders
  • Business combinations – contracts acquired in their settlement period.
  • Transition – the prohibition from applying the risk mitigation option retrospectively.
  • Extension of the IFRS 9, ‘Financial Instruments’ temporary exemption in IFRS 4, ‘Insurance Contracts’
  • Deferral of the effective date of IFRS 17
  • Additional specific transition modifications and reliefs suggested in comment letters
  • Proposed minor amendments.
  • Interim financial statements.





Our IT , actuarial and consulting teams will be quite happy to have an initial discussion with you on IFRS 17. 

Please contact Baqur Hossain for any questions or assistance you may need with your IFRS 17 projects.