Bnamericas | January 12, 2021
Chile has taken a step closer to introducing the new IFRS accounting standard for insurance contracts: IFRS 17.
Financial services watchdog CMF has put out to public consultation until May 12 draft implementation instructions.
The proposal encompasses international best practices and international recommendations concerning the constitution of technical reserves.
In 2018 watchdog officials conducted associated research and the following year instructed insurers to evaluate the impact of implementation, the latter a process that is due to be repeated.
A key aim of introducing IFRS 17 is to standardize insurance accounting globally, to improve comparability and boost transparency.
IFRS 17 is effective for annual reporting periods beginning on or January 1, 2023 with earlier application permitted as long as IFRS 9 is also applied, London-headquartered non-profit the International Financial Reporting Standards Foundation, which devised the framework, said.
IFRS 17 is a wide-ranging standard that affects various operational areas of an insurer, not just its accounting department.
In development for about 20 years, IFRS 17 replaces an interim standard known as IFRS 4, under which there is a lack of comparability among companies across countries, among insurance contracts and among industries.
CMF is working to close regulatory gaps.