This standard represents a very significant accounting change affecting the insurance industry here and elsewhere in the world. Insurers will need to adapt their accounting, actuarial valuation and disclosure practices.
IFRS 17 brings improvements in terms of increased transparency and comparability of risks. It will also have an impact on the insurers’ systems that support these activities.
These guidelines will help “maintain public and market confidence in the Quebec financial system,” said Louis Morisset, President and CEO of the AMF.
Overall, the Quebec insurance industry is well capitalized under current accounting rules and guidelines and will remain so during the transition to IFRS 17.
A long process
The transition to the new standard would not have been possible without the collaboration between the Office of the Superintendent of Financial Institutions, insurers and other stakeholders who participated in numerous consultations, discussions and quantitative impact studies.
Since IFRS 17 is new, its impacts will only be fully revealed when it is deployed from 2023. In this context, which is also marked by a rise in interest rates and high volatility on the stock markets, the AMF recommends that insurers make good risk management in their decision-making that has an impact on their level of capital.
To learn more about the new guidelines for personal insurance, click here.
Note that the AMF has also published new guidelines for damage insurance, for self-regulatory organizations and for reciprocal unions.