South Korea: Public-private panel set up to oversee introduction of IFRS17
Source: Asia Insurance Review | Apr 2017
A government-industry committee has been formed to begin full-fledged preparations for a new global accounting rule, called IFRS17, for insurers that would take effect in the early 2020s.
The preparatory panel includes an industry advisory group of the CEOs of 38 insurance companies, experts and a working support team. The committee is led by the Financial Services Commission (FSC). It is tasked with exploring ways for local insurers to cushion the short-term financial impact of implementing the new accounting standard and improving their accounting systems.
The International Accounting Standards Board is scheduled to introduce the rule in 2021. Under the rule, insurers’ liabilities will be assessed on the basis of market value, instead of book value, at the time of a contract.
The standard is expected to enable a fairer assessment of insurers’ ability to withstand stress and also force them to have more capital and reserves to cover potential losses.