Overall, we welcome the proposals, and although they would be complex to implement they do respond to many aspects of constituent feedback on profit or loss volatility arising from short-term market fluctuations.
We believe that both Boards’ proposals represent an improvement on those issued in 2010, and that arriving at common approaches under both reporting frameworks would mean a significant improvement in transparency and consistency. However, while we broadly agree with the principles in the revised proposals, we do have several specific areas of concern. Furthermore, we believe that the Boards should seek to resolve key differences between their respective proposals.
However, the goal of a single comprehensive insurance contracts standard should not come at the expense of a significant delay. Given the current diversity in accounting practice for insurers under IFRS, an insurance IFRS is urgently needed.