The International Accounting Standards Board (IASB) hopes to start balloting members on the insurance contracts standard after its board meeting this month.

Staff will ask the board to review the process for obtaining the final standard and, if approved, the ballot will begin shortly after.

At the recent IASB board meeting final decisions on the outstanding technical items were approved, although not unanimously.

Items agreed included the level of aggregation for onerous contracts.

It has now been agreed this should only be recognised when the contractual service margin is negative for a group of contracts.

It was also agreed that if no further service is provided in a contract after the end of the insurer’s reporting period, the margin should be recognised in that year’s profit and loss figures.

The IASB has agreed there should be no exception to the level of aggregation for determining onerous contracts or the allocation of a contractual service margin when regulation affects contract pricing.

It has also asked staff to provide wording for this clause in the standard, to improve the clarity of the proposals.

The board also agreed to require an insurer to specify at the start of a contract how it views its discretion.

The insurer would use this to distinguish between the effect of changes in market variables and changes in discretion.

If the insurer is unable to specify in advance how it will determine the amounts due to policyholders, then the default benchmark will be a current market return.