ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified the timeframe for the implementation of the International Financial Reporting Standard (IFRS) 17, for the companies engaged in insurance/takaful and re-insurance/re-takaful business.
According to a press release on Thursday the implementation of IFRS 17 will enhance the quality of information and reporting standards in the insurance industry and boost its international comparability.
The new time frame adopted with the consent of all stakeholders, is January 1, 2026. IFRS 17 requires all insurers to reflect the effect of economic changes in their financial statements in a timely and transparent manner.
Insurers are also required to provide improved information about the current and future profitability prospects.
IFRS 17’s enhanced transparency is estimated to boost long-term financial stability by providing valuable information that allows for timely intervention.
The International Accounting Standards Board (IASB) had replaced the IFRS 4, Insurance Contracts, with IFRS 17, effective from January 1, 2023.
In order to ensure a smooth transition to IFRS 17 in an effective manner, SECP has introduced a four-phase approach for the insurance industry: (i) gap analysis; (ii) financial impact assessment; (iii) system design and methodology; and (iv) parallel run implementation.
The insurance industry has already completed the phases of gap analysis and financial impact assessment, and currently Phase 3, “System Design and Methodology,” is in progress.
