The National Insurance Commission (NAICOM) has said that effective January 1, 2023, all insurance and reinsurance companies in Nigeria would migrate from the present International Reporting Finance Standard (IFRS) 4 finance reporting model to IFRS 17.
With this, insurance and reinsurance firms would be expected to present their financial reports in accordance with IFRS 17, whose objective is to ensure that an insurance companies provides relevant information their transactions.
The commission said the information in the IFRS accounting model of insurance firms would form the basis for users of financial statements to assess the effect that insurance contracts have on the entities’ financial position, financial performance and cashflows.
The Commissioner for Insurance, Mr. Sunday Thomas, who disclosed this at the inauguration ceremony of the sub-working groups of the insurance industry financial reporting working group (IIFRWG) in Lagos, said what this means is that the insurance industry has less than two years to prepare for the adoption of IFRS 17.
“If the effective date of application is not shifted further by the IASB, it therefore means that Nigeria insurance industry has less than two years to prepare for the adoption of IFRS 17.
“It is against this backdrop that the Commission hereby constitutes a Sub Working Group (SWG) that will help to foster the country’s adoption of the IFRS 17 in line with best practice,” the Commissioner said.
He said the Commission had earlier issued a roadmap on adoption of IFRS 17 insurance contract for insurance industry in Nigeria, noting that activities and timelines were intended to set the tone and facilitate a coordinated process and action steps.
“The roadmap was issued for general adoption by all insurance, reinsurance, takaful and micro insurance companies in Nigeria, in addition to the inauguration of the llFRWG and issuance of the roadmap,” he added.
Thomas said the regulatory body had equally organised a capacity building forum on IFRS 17 for CEOs, non-Executive directors and accountants in the sector.
Thomas, said it was in furtherance of providing technical recommendations and production of relevant guidance for the implementation of IFRS 17 that members of the IIFRWG are now grouped into SWG.
He said the sub-working groups were constituted to assist the IIFRWG in the achievement of its mandates by considering those technical aspects in the implementation of IFRS 17, adding that it would support in the seamless transition.
According to him, the llFRWG had identified the following three critical sub working groups namely: Accounting, Disclosure and Reporting Sub-Working Groups.
He said they were meant to assist on technical issues relating to accounting, technical, actuarial, data governance, process and systems sub-working groups.
According to him, the Policy and Methodology Sub-Working Group was meant to interpret requirements and draft methodologies and policies.
“Membership of each of the SWG is selected based on a member area of strength in terms of knowledge and experience to contribute meaningfully to the achievement of the assignment of the SWG,” he added.
According to him, the aim was to ensure that the views from stakeholders interested in insurance financial reporting issues are properly considered in discussions at SWG.
“It is important to restate that the Sub Working Group is advisory in nature. Thus, the Sub-Working Group’s output will always take the form of recommendation to the IIFRWG for further consideration,” he explained.
The NAICOM boss, promised that the Commission would continue to give full support to the Sub Working Groups to facilitate their smooth working and in achieving the set goals.