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Saturday February 24, 2024

SECP adopts IFRS 17

By Our Correspondent
December 08, 2023

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday it had adopted a new international accounting standard for the insurance sector, aimed at improving transparency and comparability of financial statements.

The SECP said in a statement it had notified the adoption of the International Financial Reporting Standard (IFRS) 17 - Insurance Contracts - for companies engaged in insurance/takaful and re-insurance/re-takaful business.

The logo of the Securities and Exchange Commission of Pakistan. — Facebook/SECP
The logo of the Securities and Exchange Commission of Pakistan. — Facebook/SECP

The new standard, which replaces the IFRS 4 - Insurance Contracts, requires insurers to reflect the effect of economic changes in their financial statements in a timely and transparent way. It also requires providing improved information about the current and future profitability probabilities. The SECP said the implementation of IFRS 17 would enhance the quality of information and reporting standards in the insurance industry and its global comparability. It said the new adoption time frame, agreed upon in collaboration with all stakeholders, was January 1, 2026.

The regulator said it had envisaged a four-phase approach for the insurance industry to ensure a smooth transition to IFRS 17: gap analysis, financial impact assessment, system design and methodology, and parallel run implementation.