IFRS 17 Insurance Contracts (One day)

Speaker:  Robert Phelps BA FCA  |  CPD Hours: 6

Price £595 plus VAT

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OBJECTIVES

IFRS 17 changes fundamentally the way in which insurance contracts are accounted for over time. After investing 20 or so years of development effort into IFRS 17, the IASB expectation is that it will bring greater transparency about the profitability and financial position resulting from conducting insurance contract business.

Preparing for and implementing IFRS 17 is problematic and challenging, requiring considerable effort to gain an initial understanding of the impact on the reported numbers as well as identifying upgrades to processes and systems to ensure they can provide IFRS 17 compliant data.

This one day course will commence with a review of the basics of the general accounting model for insurance contracts using a worked numbers example. This will be followed by a consideration of the main areas of difficulty that will arise in practice in applying the model to insurance contracts. These and the IFRS 17 solution to them will be illustrated (where appropriate) with further numbers examples which will be worked through interactively with the participants.

Learning outcomes

By the end of the course participants will be able to:

  • Demonstrate a working knowledge of the basic elements of the general accounting model applied by IFRS 17
  • Articulate the key numbers that will be presented in the statements of profit or loss and financial position and how different they are to those under current practice
  • Communicate to others the story that the IFRS 17 numbers are telling
  • Explain the main areas of difficulty that will most likely arise in practice
  • Articulate the permitted modifications to the general model, in particular the premium allocation approach
  • Demonstrate the timetable for transition to IFRS 17 and explain the processes and pros and cons of the different options available.

CONTENT

Introductions, objectives, background and scope

  • Introductions and course objectives
  • Background to IFRS 17
  • Scope exclusions

Identifying insurance contracts and groups of insurance contracts for accounting purposes

  • How to identify insurance contracts
  • Separation of non-insurance elements
  • Portfolios, cohorts and groups- how to arrive at the unit of account

Out with the old and bring in the new – the basics of the general model explained

  • Worked example illustrating the difference between previous and IFRS 17 reporting practice
  • Discussion of the main inputs and their variability

Review, discussion and illustration of problem areas that will arise in practice in applying the general model

  • Onerous contracts and loss components
  • Discounting and the time value of money
  • Cash flow estimation framework
  • Accounting for changes in the cash flow estimates and the NFRA

The premium allocation approach

  • Eligibility
  • The PAA explained step by step with worked examples

Other significant topics

  • Reinsurance
  • Contracts with participation features
  • Modifications and derecognition

Transitional rules

Explanation and illustration of the IFRS 17 approaches available

WHO SHOULD ATTEND

Anyone needing a understanding of this standard particularly the finance department, to legal teams, sales departments, etc.

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