The London-based International Accounting Standards Board (IASB), decided on Wednesday to consult on temporary fixes to shield insurers from the loan-loss rules which are aimed mainly at forcing banks to recognise losses on loans earlier.
Since it became obvious earlier this year that the effective date of IFRS 4, Insurance Contracts could not be aligned with the effective date of IFRS 9 there were calls for the IASB to delay application of IFRS 9 for insurers.
The IASB said yesterday in a statement that;
Companies whose business model is predominantly to issue insurance contracts” could defer the effective date of applying the loan loss rule to 2021.
The IASB aims to complete the new insurance rule in 2016 and will then decide on its implementation date. The new insurance rule would replace the existing one and the temporary fixes being added.