IASB discusses redeliberation plan for proposed IFRS 17 amendments
20 Nov 2019
At its meeting currently held in London, the IASB was given an overview of the feedback received on the exposure draft ED/2019/4 'Amendments to IFRS 17' and discussed a plan for redeliberating the proposed amendments.
There were four papers for the meeting (all links to the IASB website):
- Agenda Paper 2A provided an overview of the comment letters and overall feedback on the exposure draft.
- Agenda Paper 2B summarised the feedback from the comment letters on the ten questions in the exposure draft.
- Agenda Paper 2C summarised comments on areas for which amendments to IFRS17 were considered but not proposed and other comments.
- Agenda Paper 2D set out the staff recommended plan for redeliberations and asked whether the Board agreed with that plan.
The proposed redeliberation plan summarised staff recommendations for each point for the Board to decide whether it could confirm the proposed amendment at a future meeting, should consider further the feedback from respondents on the topic, or did not intend to consider further the topic.
The Board did not discuss each of the topics individually. Rather, the staff grouped the topics together into three groups:
- Proposed amendments that could be confirmed without further discussion because of general support in the comment letters (listed in Agenda Paper 2D paragraph 7).
- Proposed amendments that warranted further discussion as the feedback in the comment letters was constructive and provided at least a "little element" of new information (listed in Agenda Paper 2D paragraph 9).
- Topics that did not warrant further discussion as either there was support in the comment letters for the Board not picking them up or as the feedback in the comment letters did not provide any new information (listed in Agenda Paper 2D paragraph 10).
The Board's votes translate as follows into the staff's table of proposed further actions included as Appendix A in Agenda Paper 2D:
| Question/Topic | Detailed description in Agenda Paper, paragraphs | Staff recommendation | Board decision |
|---|---|---|---|
| Question 1(a) — Scope exclusion for credit cards | 2B, 6‒9 | Consider further the feedback from respondents | 14 Yes |
| Question 1(b) — Scope exclusion for loans | 2B, 10-14 | Confirm the proposed amendment | 14 Yes |
| Question 2 — Expected recovery of insurance acquisition cash flows | 2B, 15-21 | Consider further the feedback from respondents | 14 Yes |
| Question 3(a) — Contractual service margin attributable to investment services | Coverage units for insurance contracts without direct participation features | 2B, 22‒24 | Consider further the feedback from respondents | 14 Yes |
| Question 3(b) — Contractual service margin attributable to investment services | Coverage units for insurance contracts with direct participation features | 2B, 25‒27 | Confirm the proposed amendment | 14 Yes |
| Question 3(c) — Contractual service margin attributable to investment services | 2B, 28‒31 | Consider further the feedback from respondents | 14 Yes |
| Question 4 — Reinsurance contracts held — recovery of losses | 2B, 32‒36 | Consider further the feedback from respondents | 14 Yes |
| Question 5 — Presentation in the statement of financial position | 2B, 37‒41 | Confirm the proposed amendment | 14 Yes |
| Question 6 — Applicability of the risk mitigation option | 2B, 42‒47 | Confirm the proposed amendment for reinsurance contracts held and consider further the feedback from respondents on non-derivative financial instruments measured at fair value through profit or loss | 14 Yes |
| Question 7(a) — Effective date of IFRS 17 | 2B, 48‒53 | Consider further the feedback from respondents | 14 Yes |
| Question 7(b) — IFRS 9 temporary exemption in IFRS 4 | 2B, 54‒59 | Consider further the feedback from respondents | 14 Yes |
| Question 8(a) — Transition reliefs for business combinations | 2B, 60‒66 | Confirm the proposed amendment and consider further the feedback from respondents on contracts acquired in their settlement period | 14 Yes |
| Question 8(b)–(c) — Transition reliefs for the risk mitigation option | 2B, 67‒72 | Confirm the proposed amendment and consider further the feedback from respondents on the prohibition from applying the risk mitigation option retrospectively | 14 Yes |
| Question 9 — Minor amendments | 2B, 73‒77 | Consider further the feedback from respondents | 14 Yes |
| Question 10 — Terminology | 2B, 78‒82 | Consider further the feedback from respondents as part of the discussion of Question 3 | 14 Yes |
| Level of aggregation | 2C, 7‒13 | Consider further the feedback from respondents on some specific contracts | 14 Yes |
| Cash flows in the boundary of a reinsurance contract held | 2C, 14‒19 | Do not plan to consider further the topic | 13 Yes |
| Subjectivity in the determination of discount rates and the risk adjustment for non-financial risk | 2C, 20‒24 | Do not plan to consider further the topic | 13 Yes |
| Risk adjustment for non-financial risk in a consolidated group of entities | 2C, 25‒29 | Do not plan to consider further the topic | 13 Yes |
| Discount rate used to determine adjustments to the contractual service margin | 2C, 30‒36 | Do not plan to consider further the topic | 13 Yes |
| Other comprehensive income option for insurance finance income or expenses | 2C, 37‒41 | Do not plan to consider further the topic | 13 Yes |
| Business combinations| Contracts acquired in their settlement period | 2C, 42‒48 | Consider further the feedback from respondents | 14 Yes |
| Business combinations| Classification of contracts acquired | 2C, 49‒55 | Do not plan to consider further the topic | 13 Yes |
| Scope of the variable fee approach| Reinsurance contracts issued | 2C, 56‒62 | Do not plan to consider further the topic | 13 Yes |
| Interim financial statements | 2C, 63‒74 | Consider further the feedback from respondents | 14 Yes |
| Mutual entities issuing insurance contracts | 2C, 75‒79 | Do not plan to consider further the topic and confirm the addition of the proposed footnote to the Basis for Conclusions on IFRS 17 | 13 Yes |
| Additional transition modifications and reliefs | 2C, 80‒81 | Consider further the feedback from respondents on additional specific transition modifications and reliefs | 14 Yes |
| New concerns and implementation questions | 2C, 82‒85 | Consider further the feedback from respondents | 14 Yes |
The staff plan to present papers on the above topics to the Board at future meetings in the period from December 2019 to February 2020. The staff expect that there will sufficient time for the Board to consider the detailed feedback and finalise any resulting amendments by mid-2020.
