In its endorsement advice, EFRAG committed to sending an update on the IASB's progress in addressing concerns relevant to the insurance industry. A draft letter to be send to the European Commission has now been made available on the EFRAG website. EFRAG notes that the IASB has decided to propose a deferral approach and an overlay approach, both aimed at addressing the mismatch, in December this year, but states:

The IASB is progressing options to address the issues facing the insurance industry. However, as of the date of this letter, we are not in a position to amend our recommendation that “all businesses other than those carrying out insurance activities are required to account for their financial instruments in compliance with IFRS 9 in 2018 and businesses carrying out insurance activities are permitted to do so in compliance with IFRS 9 from the same date”.

EFRAG explains that any final decisions in the project will be made at the earliest in six to nine months from now and that uncertainty exists as to whether the IASB will provide an appropriate remedy when it makes these final decisions:

EFRAG assesses, on a very preliminary basis, that the IFRS 4 amendments, if finalised on the basis of current IASB tentative decisions, would not allow EFRAG to lift the reservations included in its endorsement advice of IFRS 9.

Please click to access the draft letter on the EFRAG website. Comments are requested by 20 November 2015 as the intention is to finalise the letter during the meeting of the EFRAG Board on 24 November 2015.