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Chuks Udo Okonta
The National Insurance Commission (NAICOM) today inaugurated the Sub Working Groups (SWGs) of the Insurance Industry Financial Reporting Working Group (llFRWG), that was constituted to assist the Insurance Industry Financial Reporting Working Group (llFRW) and provide guidance for seamless adoption of IFRS 17 which will take effective January 1, 2023.
The Commissioner for Insurance, Sunday Thomas, at the event in Lagos, said the Insurance Industry Working Group (llFRWG) which is an initiative of the Commission was inaugurated 2nd of March 2020 as an advisory and consultative team of experts for the purpose of seamless adoption of IFRS 17 in Nigeria, stressing that the initiative is in line with the Commission’s strategic goal as IFRS 17 will facilitate transparency and accountability in financial reporting. “On this note, I am glad to state that the Working Group has performed creditably well and we appreciate all the members for selfless service to the Nigerian insurance industry in this journey to IFRS 17,” he said.
Participants at the event.
“We all know 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 01, 2023.
“Thus, beginning from January 01, 2023, all insurance and reinsurance contracts must be reported in accordance with IFRS 17 whose
objective is to ensure that an provides relevant information by 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
(2) 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 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 organized an IFRS awareness training on IFRS 17 for CEOs, Non-Executive Directors and Accountants of insurance and Re-insurance companies in Nigeria. The two days awareness training session was equally a huge success.
“It is now in furtherance to providing technical recommendations and production of relevant guidance for the implementation of IFRS 17 that members of the IIFRWG is now grouped into SWG that we are today inaugurating. The Sub Working Groups are constituted to assist the IIFRWG in the achievement of it mandates by considering those technical aspects in the implementation of IFRS 17 and that will support in the seamless transition,” he said.
Thomas maintained that Members of the various SWGs comprises some selected members of the IIFRWG and the co-opted members selected from the various organisations.
According to him, membership of each of the SWG was 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. The aim is to ensure that the views from stakeholders interested in insurance financial reporting issues are properly considered in discussions at SWG, he said.
He stressed 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.