The IASB has published an exposure draft (ED), Amendments to IFRS 17, to address concerns and implementation challenges with IFRS 17, “Insurance Contracts,” which was published in 2017.
Revisions made by the proposed amendments would include:
Deferral of the date of initial application of IFRS 17 by one year to annual periods beginning on or after January 1, 2022, and change in the fixed expiry date for the temporary exemption in IFRS 4, Insurance Contracts, from applying IFRS 9, Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods beginning on or after January 1, 2022.
Optional scope exclusion for loan contracts that transfer significant insurance risk and related transition requirements to enable entities issuing such contracts to account for those contracts by applying either IFRS 17 or IFRS 9.
Scope exclusion for credit card contracts that provide insurance coverage.
Amendments related to allocation, recognition, recoverability assessment, and disclosure of insurance acquisition cash flows associated with expected contract renewals.
Amendments related to the contractual service margin allocation.
Extension of the risk mitigation option to reinsurance contracts held.
Requirement for entities to recognize a gain on reinsurance contracts held when, at initial recognition, such entities also recognized losses on onerous insurance contracts issued.
Simplified presentation of insurance contracts in the statement of financial position.
Transition relief related to business combinations.
Transition relief related to the date of application of the risk mitigation option and the use of the fair value transition approach.
The proposed effective date for the amendments would be the same as the proposed new effective date for IFRS 17 (January 1, 2022). Early application would be permitted. The amendments would be applied retrospectively.
Comments on the proposed amendments are due by September 25, 2019. For more information, see Deloitte's IFRS in Focus newsletter as well as the press release, snapshot, and ED on the IASB’s Web site.