NAICOM Moves To Ensure Seamless Adoption Of IFRS 17 By Insurers

By Sola Alabadan

The National Insurance Commission (NAICOM) on Monday inaugurated the Sub Working Groups (SWGs) of the Insurance Industry Financial Reporting Working Group (IIFRWG) to assist the Insurance Industry Financial
Reporting Working Group (IIFRW) in providing guidance for seamless adoption of IFRS 17 effective January 1, 2023 by the Nigerian insurance companies.

The three sub working groups are: Accounting, Disclosure and Reporting Sub-Working Group; Technical, Actuarial, Data Governance, Process and Systems Sub-Working Group and Policy and Methodology Sub-Working Group.Accounting, Disclosure and Reporting Sub-Working Group to assist on technical issues relating to accounting; Technical, Actuarial, Data Governance, Process and Systems Sub-Working Group to assist on technical issues relating to actuarial, data and IT and Policy and Methodology Sub-Working Group to interpret requirements and draft methodologies and policies.

The Commission had inaugurated IIFRWG on March 2, 2020 as an advisory and consultative team of experts for the purpose of seamless adoption of IFRS 17 in the country.

This initiative is in line with the Commission’s strategic goal as IFRS 17 will facilitate transparency and accountability in financial reporting, the Commissioner For Insurance, Sunday Thomas said.

He stated that the Working Group has performed creditably well and appreciated all the members for selfless service to the Nigerian insurance industry in this journey to IFRS 17.

Recalled that in May 2017 the International Accounting Standard Board (IASB) issued the international Financial Reporting Standard 17 (IFRS 17) Insurance Contract which will replace the present IFRS 4 on accounting for insurance contracts with an effective date of January 1, 2023.
Thomas said, beginning from January 1, 2023, all insurance and reinsurance contracts must be reported in accordance with IFRS 17 whose objective is to ensure that an entity provides relevant information that faithfully represents the insurance contracts.

“This information forms the basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance and cash flows.
“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 that will help to foster the country’s adoption of the IFRS 17 in line with best practice.

“The Commission had equally issued a “Roadmap” on Adoption of IFRS 17 Insurance Contract for Insurance Industry in Nigeria” on January 28, 2020. The activities and timelines in the Roadmap are 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, the Commission had organised an IFRS awareness training on IFRS 17 for CEOs,
Non-Executive Directors and Accountants of insurance and Re-insurance companies in Nigeria.

Members of the various SWGs comprises some selected members of the IIFRWG and the co-opted members selected from the various organisations, based on their area of strength in terms of knowledge and experience to contribute meaningfully to the achievement of the assignment of the SWG.