Page 36 - The Insurance Times August 2022
P. 36

INTERNATIONAL




          FINANCIAL




          REPORTING




          STANDARD 17




          (IFRS 17) - INSURANCE




          CONTRACTS








                                                       Abstract
           International Financial Reporting Standard 17 - Insurance Contracts, (IFRS 17),  latest addition to  Accounting Standards
           has been issued by the International Accounting Standards Board and is expected to be effective from the reporting
           periods beginning on or after 1st January 2023. It took about 20 years to give shape to this standard, is a testimony
           to the special and complex nature of insurance transactions and insurance contracts. Several new concepts and new
           models for measurements had to be introduced to meet the special reporting needs of insurance contracts. Adoption
           of this new standard is likley to have significant changes for insurers, particularly life insurers. The standard prescribes
           a simplified alternate measurement model called Premium Allocation Approach for those insurers who fullfill the
           conditions prescribed. One eligibility criteria for premium allocation approach is policy period being one year or less.
           Non-life insurers mostly issue annual policies. The current practices of non-life insurance industry to a great extent
           seem to be in compliance with this model.  However long term policy segment of non-life insurance might require
           major changes, if the segment fails to fulfill the other eligibility criteria prescribed for adopting Premium Allocation
           Approach. There is a huge need for developing proper understanding of various provisions of the standard, amongst
           the stakeholders. The purpose of this write up is to, explore and develop some basic understanding of various provisions
           of the standard, concepts and models introduced by it, and more particularly, flag different provisions of the standard
                                                               which  might call  for  industry level deliberations to
                               About the author                examine their applicability and relevance to  non-life
                                                               industry. The mist around the provisions will disappear
                        S H Gejji
                                                               slowly and clarity will emerge as the experts throw more
                        Post Graduate in Commerce. - M.com
                                                               and more light on various provisions and as the insurers
                        Degree in Law. - LLB(General)
                                                               start adopting the new standard.
                        Fellow  of  Insurance Institute of India. - FIII
          36  The Insurance Times, August 2022
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