IAI & ICAI announce training for IND AS / IFRS implementation
It requires the entities to identify portfolios of insurance contracts that have a similar risk profile; It has further requirements on how these contracts need to be measured
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The Institute of Actuaries of India (IAI) along with the Institute of Chartered Accountants of India (ICAI) announced a deep dive training program in Ind AS 117/IFRS 17 as a part of implementation of new accounting standards in the Insurance sector in India.
The training program is an initiative by the insurance regulator of India, the Insurance Regulatory and Development Authority of India (IRDAI) in order to set the ground for implementation of Ind AS/ IFRS in the insurance sector.
The IFRS expert committee constituted by IRDAI created the structure and content of the five days deep dive training for professionals across various lines of insurance business, viz., life, general and health. The first batch of the training is scheduled in December 2022. Expert actuarial and accounting faculties are brought in from both professional institutes to conduct various sessions. There are at least ten sessions planned targeting about 1500 professionals across the industry during the period of next six months.
The Ind AS 117 / IFRS 17 is applicable for insurance contracts. It requires the entities to identify portfolios of insurance contracts that have a similar risk profile. It has further requirements on how these contracts need to be measured. The standard suggests three approaches for the measurement: General Measurement Model (GMM), Variable Fee Approach (VFA) and Premium Allocation Approach (PAA) based on the type of contracts.
Talking to Bizz Buzz, R Arunachalam, president of Institute of Actuaries of India, said: "The aim of the accounting standard is to bring greater clarity, relevance, reliability, transparency and comparability to financial statements. All stakeholders need to understand the interrelationship between the current methods, timing of reporting, requirements of new accounting standards and fundamental changes to be adopted. The reporting entities need to adopt changes not only as regards modelling, data collection, processes or systems but also the way in which profits are reported."
The deep dive training will help the participants understand the complex accounting standard, its importance and inter connectivity with the various contracts and activities of the entity. This assumes greater significance for the implementation of the standard across the industry.
This training program is unique and different in a way that it brings together two key professional bodies relevant to implementing the standards. Perspectives from actuaries, accountants and auditors would help give a holistic view to what is a paradigm shift in reporting for insurance contracts.
He further added that the implementation of the standard would put the reporting standards for India at par with global standards and IAI is fully committed to successful implementation of IND AS 117 / IFRS 17.
