IFRS 17 Insurance Contracts likely to be deferred to 2022

The International Accounting Standards Board (Board) is proposing to defer the implementation date of IFRS 17 Insurance Contracts from 1 January 2021 to 1 January 2022. The Board is also proposing to extend the temporary exemption for insurers to apply the financial instruments Standard, IFRS 9 Financial Instruments, so that both IFRS 9 and IFRS 17 can be applied at the same time.

While the Board has been proactively working to support insurers with their transition processes, including through establishing a Transition Resource Group and providing education materials, it has also sought to understand concerns about the ability of insurance companies to be ready to implement the new standard from 2021.

The proposed one-year deferral is to address these concerns regarding preparedness for the new standard, but at the same limiting the deferral period so that implementation is not unduly disrupted.

The proposed deferral is subject to public consultation, which is expected next year.