From: Captive Intelligence
- Captives must understand what constitutes insurance contracts
- Captives should value direct risk and reinsurance separately
- Asia Pacific domiciles conforming most tightly to IFRS 17 reporting standards
- Singapore implementation increases bureaucracy with no added benefit
The implementation of IFRS 17, particularly in certain jurisdictions, has had significant implications on the way insurance contracts are valued with some commentators suggesting it is stifling experimentation and innovation.
IFRS 17 is an International Financial Reporting Standard (IFRS) that replaced IFRS 4 and has been implemented by the International Accounting Standards Board (IASB) and provides new insurance contract guidelines.
It applies to jurisdictions that require or permit IFRS, though some countries continue to use local Generally Accepted Accounting Principles (GAAP) instead.
In some domiciles, captives may be allowed to use IFRS 17 voluntarily or follow local GAAP standards, but this varies by country.
Those jurisdictions where implementation of IFRS 17 is most stringent, primarily in Asia Pacific, service providers and captive owners argue the new accounting standard is overly burdensome and costly for captives.
