IASB publishes exposure draft for new IFRS – Insurance Contracts
Jul 30, 2010
The IASB has published for public comment an exposure draft of a proposed IFRS for insurance contracts. Exposure Draft ED/2010/8 Insurance Contracts proposes a single IFRS that all insurers, in all jurisdictions, could apply to all contract types on a consistent basis. The proposed IFRS would apply to writers of both insurance and reinsurance contracts.
A summary of the key proposals follows:
Scope and recognition
The proposed IFRS would apply to all insurance contracts as defined. An insurance contract would be recognised at the earlier of:
An insurer would derecognise an insurance liability when it is extinguished.
Measurement of the insurance contract is based on a 'building block approach' that portrays a current assessment of the contract, using the following:
The building blocks would be used to measure the combination of rights and obligations arising from an insurance contract rather than to measure the rights separately from the obligations. The combination of rights and obligations would be presented on a net basis.
With respect to disclosure, the ED proposes that entities should disclose qualitative and quantitative information about:
ED/2010/8 is open for comment until 30 November 2010. Click for: