10 March 2015

Insurance Europe: Concerns expressed to EFRAG on staggered IFRS implementation

Insurance Europe and the CFO Forum's letter noted that, due to insurers’ business model, it is important that accounting requirements for financial instruments and insurance liabilities are considered together as a package.

IFRS 4 Phase II will not, however, be ready by the implementation date for IFRS 9 in 2018. Consequently, insurers are concerned that they will have to implement IFRS 9 on a temporary basis and then alter it again, at considerable cost, when IFRS 4 Phase II is implemented later.

The letter also pointed out that if IFRS 9 and IFRS 4 Phase II need to be implemented separately it will cause significant confusion, both for users and investors.

While a potential European solution has been put forward to allow insurers to implement the two standards together, the letter points out that a global solution is needed, so asks EFRAG to push the International Accounting Standards Board (IASB) to develop such a solution.

Press release

Joint letter

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