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Guernsey Maintains Its Leading Edge In Captive Insurance
In the dynamic global risk landscape, Guernsey has continued to assert its position as Europe's prem…
Captive Insurance
Navigating The Captive Insurance Landscape As IFRS 17 Takes Shape Across Markets
Christie Lee
AM Best
Insurance companies, including captives, are at different phases in their journey toward adopting the new International Financial Reporting Standard 17 (IFRS 17), which took effect across many markets around the world for reporting periods starting 1 January 2023. Despite this progress, many jurisdictions have delayed the implementation of IFRS 17 and will adopt the new accounting standard between 2024 and 2026.
What Is IFRS 17?
After over twenty years of development, the International Accounting Standards Board (IASB) issued IFRS 17 Insurance Contracts in May 2017, entailing a comprehensive new accounting standard for insurance contracts. In June 2020, the IASB issued amendments to IFRS 17, including changing the implementation date to 2023. Once effective, IFRS 17 replaces IFRS 4 Insurance Contracts; most companies are also adopting IFRS 9 on a parallel basis, which involves recognition of assets.
IFRS 17 is a market value-focused accounting standard for insurance contracts based on discounting future cash flows. Additionally, the standard recognizes profit over the period that services are provided under the contract. The new reporting standard brings material changes to accounting principles, rules, presentations and financial disclosures for insurance companies on how they should value and report insurance contracts. It also aims to bring greater transparency and comparability, especial…
