NFRA reviews proposals for new accounting standards for insurance contracts
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Ind AS 117 is modelled on the IFRS 17, issued by the International Accounting Standard Board of IFRS foundation. It is expected to help investors and other stakeholders to better gauge the risk exposure and key financial parametres of insurers.
NFRA will share its recommendations with the ministry of corporate affairs, which will consider the Ind AS 117 and notify the standards under Companies (Indian Accounting Standards) Rules 2015. Once notified, Ind AS 117 will replace the current Ind AS 104, Insurance Contracts.
IFRS 17, the global Standards, are specifically designed to capture the unique features of the insurance and investment contracts of the Insurance Entities. It would "entail a paradigm shift in the measurement, presentation and disclosure requirements", according to a NFRA statement issed on Thursday.
IASB’s factsheet of 2017 says, with $13 trillion in assets, insurers account for 12% of the total assets of listed companies that use IFRS Standards.
According to NFRA chairman Ajay Bhushan Pandey, Ind AS 117 is substantially converged with IFRS Standard adopted in over 140 countries. "This standard will enable the Indian insurance industry to present globally comparable financial information which augurs well for enhanced investment in the sector needed for increasing the insurance penetration in the country," Pandey said.
NFRA has already held an outreach with members from the life insurance industry on the new standards.
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01-May-2023 , 12:53:33 pmADEDF