THE IMPLEMENTATION date is approaching fast and legislative changes are still needed before insurers can report using the new IFRS-17 accounting standard.
Speaking at the Canadian Insurance Financial Forum in Niagara-on-the-Lake, Ont., Gary Timlick, Wawanesa Mutual senior vp and chief financial officer, said the change is a “tremendous” undertaking, so the insurance industry has to work actively with regulators and lawmakers.
“The Income Tax Act has to be amended and we all know that it isn’t easy to get legislation passed but they are going to have to get going,” he said.
“The Department of Finance and (Canada Revenue Agency) has to start working on legislation to accommodate this new development.”
Mr. Timlick said some of the key changes will be to insurers’ balance sheet composition.
“You won’t have a host of characteristics that we have historically seen on our balance sheets, so there is a big change there,” he said.
“It’s a tremendous amount of work at all levels of the organization with regards to assessing the impact and doing all the work to understand what has to change within each individual organization.”
IFRS-17, which was released by the International Accountings Standards Board in May 2017, is designed to increase the comparability of financial statements worldwide, provide global consistency and increase transparency, Mr. Timlick said.
The deadline for implementation is Jan. 1, 2021.
“Wawanesa just completed impact analysis identifying the gaps and now we are working on the timeline to correct the issues we have identified,” Mr. Timlick said.
“We have a large number of people in the office working on this and we have to pull in actuaries and IT guys. “This is a major undertaking and its not going to be easy and we will be fighting through the next 18 months to get it done.”
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