The National Insurance Commission (NAICOM) has activated its machinery as part of efforts towards the launch of the new International Financial Reporting Standard 17 (IFRS 17) for Insurance Contracts scheduled for January next year.
The International Accounting Standard Board (IASB) has since May 2017 given a new directive on IFRS 17 Insurance Contract as a replacement for the current IFRS 4 .
The Commissioner for Insurance, Mr Sunday Thomas at the inauguration of the Sub-Working Groups (SWG) of the insurance industry financial reporting working group (IIFRWG) in Lagos said the constituted SWGs would assist the IIFRWG in providing guidance for seamless adoption of IFRS 17 by the Nigerian insurance companies effective January 1, 2023.
He said the initiative was in line with the Commission’s strategic goal, as IFRS 17 would facilitate transparency and accountability in financial reporting in the industry.
Mr Thomas acknowledged the creditable performance of the Working Group and expressed appreciation to members for their selfless service to the Nigerian insurance industry in this journey to IFRS 17.
“We all know that in May 2017 the International Accounting Standard Board (IASB) issued the international Financial Reporting Standard 17 (IFRS 17) Insurance Contract, which will replace the present IFRS 4 on accounting for insurance contracts with an effective date of January 01, 2023.
“Thus, beginning from January 01, 2023, all insurance and reinsurance contracts must be reported in accordance with IFRS 17 whose objective is to ensure that an entity provides relevant information that faithfully represents the insurance contracts.
“This information forms the basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance and cash flows,” Thomas said.
He said the constitution of the SubWorking Group was necessary to help in fostering the country’s adoption of the IFRS 17 in line with acceptable
best practice barring any fresh shift in the effective date of the application by the International Accounting Standards Board (IASB).
In case there was no such further shift, he said the Nigerian insurance industry would be afforded less than two years to prepare for the adoption of IFRS 17.
Also, on January 28, 2020, he said the Commission issued a “Roadmap” on Adoption of IFRS 17 Insurance Contract for Insurance Industry in Nigeria”.
The activities and timelines in the Roadmap, he said were intended to set the tone and facilitate a coordinated process and action steps.
“The Roadmap was issued for general adoption by all Insurance, Reinsurance, Takaful and Micro Insurance Companies in Nigeria.
“In addition to the inauguration of the IIFRWG and issuance of the Roadmap, the Commission also organized an IFRS awareness training on IFRS 17 for Chied Executive Officers, Non- Executive Directors and Accountants of insurance and Re-insurance companies in
Nigeria,” he said.
The new SWG, he said, would further provide technical recommendations and production of relevant guidance for the implementation of IFRS 17 that members of the IIFRWG.
Besides, the Commissioner of Insurance said the SWGs are to assist the IIFRWG in the achievement of its mandates by considering those more technical aspects in the implementation of IFRS 17 that would support in the seamless transition.