Life insurers get a break on IFRSBy Andrew Rickard | December 20 2016 09:45AM
Canadian life insurers may have until January 1, 2021 to implement certain International Financial Reporting Standard (IFRS) valuation rules.
The Office of the Superintendent of Financial Institutions (OSFI) issued a draft advisory yesterday which, if implemented, will allow federally regulated life insurers and fraternal benefit societies to defer the application of IFRS 9 on annual periods beginning before January 1, 2021. The measure is being introduced in response to amendments which were approved by the International Accounting Standards Board (IASB) in September.
"With the publication of the IASB amendment, Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts, OSFI has considered the costs and benefits and found a strong prudential need for additional accounting guidance for Life Insurers," says Carolyn Rogers, OSFI’s Assistant Superintendent of the Regulation Sector. "OSFI believes the IASB amendment can lead to inconsistencies amongst Life Insurers. As such, this Advisory will provide for a level of consistency and comparability across the federally regulated life insurance industry."
Comments on the draft advisory should be submitted to OSFI on or before January 31, 2017. The regulator says it will consider all stakeholder comments when developing the final version.