APRA flags AASB 17 consultation
A discussion paper outlining the approach to integrating new accounting standards into the capital framework for insurers will be released at the end of next year.
The Australian Prudential Regulation Authority (APRA) has now invited feedback from insurers on their timing and approach to adopting AASB 17.
They have also been invited to also tell the regulator what it should consider when designing amendments to the capital framework.
The discussion paper will include proposals for prudential adjustments.
AASB 17 Insurance Contracts requires all contracts to be accounted for in a consistent manner, making it easier to compare performance across international markets. It is issued by the Australian Accounting Standards Board.
APRA will also consider whether changes to the capital framework are required since the last review in 2013.
Nearly all relevant capital prudential standards will be amended as part of the review.
The regulator will respond to submissions on the discussion paper and release draft prudential standards in the second quarter of 2020, followed by another response paper and the final prudential standards in the first quarter of 2021.
APRA says it does not intend to use the review of the Life and General Insurance Capital framework to increase or reduce capital levels.
The International Accounting Standards Board has voted to delay adoption of the new accounting standards by one year to 2022.