The insurance industry has renewed a call for South Korea's financial regulator to introduce the International Financial Reporting Standard (IFRS 17) and the Korean Insurance Capital Standard (K-ICS) to the domestic insurance industry in different phases.
In its request on 5 July, the insurance industry argued that the Financial Supervisory Service (FSS) should either phase in or postpone K-ICS’s implementation, claiming that simultaneous adoption with the IFRS 17 will place a huge burden on the insurance sector, according to Businesskorea. This was the latest such appeal made by the insurance sector.
It followed a statement made at a seminar a day earlier by Mr Choi Jong-ku, chairman of the Financial Services Commission (FSC), who said, “We will introduce the two systems without imposing a big burden on insurance companies.”
The K-ICS is a new system that calculates the ratio of risk-based capital by evaluating insurers’ assets and liabilities based on market value. The IFRS 17 is a new international financial reporting standard regarding the recognition, measurement, presentation and disclosure of insurance contracts.
To meet the requirements of the K-ICS and the IFRS 17, several insurers have been increasing their capital. Both norms are scheduled by the authorities to take effect in 2021.
The FSS is set to conduct an impact assessment next year, which will figure an evaluation plan scheduled to be released by the end of 2019.