Insurance Contracts
Purpose of the project
The Board decided to develop an IFRS on insurance contracts because there was no IFRS on insurance contracts, and insurance contracts were excluded from the scope of other relevant IFRSs (eg IFRSs on provisions, financial instruments and intangible assets).
Furthermore, accounting practices for insurance contracts were diverse, and also often differed from practices in other sectors. The insurance project will address accounting by both insurers and policyholders.
The Board decided to split the project in two phases.
Phase I of this project resulted in IFRS 4 Insurance Contracts, an interim standard that permits a wide variety of accounting practices for insurance contracts. Many of these practices differ from those used in other sectors and make it difficult to understand insurers’ financial statements.
In phase II, the current phase, the Board intends to develop a standard that will replace the interim standard and that will provide a basis for consistent accounting for insurance contracts on the longer term.
Current project stage
In February 2008, the Board started its review of responses to the discussion paper Preliminary Views on Insurance Contracts.
In April 2008, the Insurance Working Group had its ninth meeting. At this meeting the Working Group provided input for a number of issues that followed from the responses to the discussion paper.
The Board expects to discuss the project next in September 2008. The next meeting of the Insurance Working Group will take place in November 2008.
Is this project part of the Memorandum of Understanding?
No. The MoU sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008. Click here for more information on the MoU.
The FASB expects to decide later this year whether it should participate in this project. View more information on the FASB’s Invitation to Comment.
Next due process step
The Board expects to publish an Exposure Draft in late 2009, with a view to publishing a final standard in 2011.
Project history / due process steps completed
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April 2008 |
The Working Group provides input for a number of issues that followed from the responses to the discussion paper. |
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February 2008 |
The Board begins its review of responses to the discussion paper Preliminary Views on Insurance Contracts.
The Board decides not to hold public round-table meetings at this stage of the project, noting that the members of its Insurance Working Group supply input from a wide range of perspectives. |
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November 2007 |
The Board discusses the process for dealing with the topic of accounting by policyholders for their rights under insurance contracts (‘policyholder accounting’). At this stage, the Board expects to deal with policyholder accounting in an exposure draft without first publishing a discussion paper. |
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August 2007 |
The US Financial Accounting Standards Board (FASB) issues an Invitation to Comment on whether the FASB should add to its agenda a joint project with the IASB to develop a comprehensive standard on accounting for insurance contracts. For information on the FASB’s Invitation to Comment, click here |
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September 2004 |
The Board creates a working group to advise it on the project |
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May 2004 |
The Board issues a Discussion Paper Preliminary Views on Insurance Contracts. |
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Mid 2004 |
The Board takes up phase II of the project. Presentations from outside parties to the Board follow from than on.
Click here for a list of topics covered in Board education sessions. |
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March 2004 |
By issuing IFRS 4 Insurance contracts the Board complete phase I of the project (for Frequently Asked Questions on IFRS 4 click here) |
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January 2003 |
Work on the project is suspended due to other priorities |
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May 2002 |
The Board splits the project into two phases |
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2001-2002 |
Selected Board members and staff carry out field visits to 19 insurers in nine countries |
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July 2001 |
The IASB (formed in March 2001) takes over the project from its predecessor body and adds the project to its technical agenda. |
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December 1999 |
The Steering Committee reviews the comment letters and concludes its work in 2001 by developing a report to the IASB in the form of a Draft Statement of Principles (DSOP) |
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December 1999 |
The IASC Steering Committee publishes an Issues Paper, which attracts 138 comment letters |
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1997 |
The Board’s predecessor, the IASC, sets up a Steering Committee in 1997 to carry out the initial work on an Insurance project |
Working Group
To advise it on the project, the Board formed an Insurance Working Group, made up of senior financial executives, analysts, actuaries, auditors and regulators. The Insurance Working Group has held nine two-day meetings, starting in September 2004. For a list of participants, click here
Related projects
There are important interactions with other projects, particularly those on the conceptual framework, revenue recognition, accounting measurement, performance reporting, financial instruments and revisions to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and a potential project on liabilities and equity.
The work on insurance contracts will proceed in parallel with these other projects as much as possible.