Irdai extends IFRS 17 deadline to FY27; aims to give ample time to cos
Mumbai, Oct 16, 2024
Previously, Irdai had set a timeline of FY25 for the implementation of IFRS 17 in the insurance sector
The Insurance Regulatory and Development Authority of India (Irdai) has asked both bank-sponsored and non-bank-sponsored insurance companies to implement IFRS 17 regulations by FY27, a move that will give these companies sufficient time for implementation.
Previously, Irdai had set a timeline of FY25 for the implementation of IFRS 17 in the insurance sector. IFRS 17 or International Financial Reporting Standard 17 is an accounting standard that provides a framework for reporting insurance contracts. It states the classification of assets and liabilities of companies operating in the insurance sector and provides consistent principles for insurance contracts.
“We have received a communication from Irdai and we believe some peers have also received communication, which talks about Irdai’s intent to roll it out from April 2027,” said Niraj Shah, Executive Director (ED) & Chief Financial Officer (CFO), HDFC Life Insurance during the post-earnings analyst call.
Developed by the International Accounting Standards Board (IASB), IFRS 17 became effective on January 1, 2023.
“So, basically there is a phase-wise implementation plan, which we understand will be followed where all the large listed as well as unlisted insurance companies will go into phase one and we basically have this window of about 24 to 30 months to get this done,” Shah said.
“We will obviously be prepared to be ready well ahead of time, but we will await very clear direction from Irdai in terms of the final implementation guidelines,” he added.
The new standards will help international investors to compare the financials of domestic insurers with their global counterparts. The new accounting standards would also require domestic insurers to strengthen their disclosure needs, leading to greater transparency and better decision-making, industry experts said.
In December 2023, Irdai’s Chairman, Debasish Panda said, “Dedicated mission board teams are working at full throttle in this direction, and we are expecting that we should be able to transition to the RBC regime as well as converge to the IFRS by 2025.”
The insurance regulator has also reconstituted an Expert Committee on the implementation of Ind AS 117 or IFRS 17 headed by the Member (Finance and Investment) F&I of Irdai which will work on steps that may be taken towards the effective implementation of the new accounting framework, along with giving phase-wise timelines.
[The Business Standard]
