Highlights on Insurance Contracts
At the February 2017 meeting, the IASB voted on a number of sweep issues relating to the proposed insurance contracts standard (the ‘draft Standard’ or ‘IFRS 17’).
The IASB decided to recognise against the contractual service margin (CSM) all changes in estimates of future cash flows arising from non-financial risks under the general model as well as those arising from non-financial risks (and not relating to the underlying items) under the variable fee approach (VFA).
The IASB decided to provide an exemption from the requirement to separately group contracts that fall into different groups because law or regulation constrains an entity’s ability to set a different price or level of benefits for policyholders with different characteristics.
The IASB confirmed that there are no remaining questions that they would like the Staff to consider at a future meeting. The Staff will continue drafting IFRS 17 and the IASB expects to issue the standard in May 2017.