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30/09/2020 - EFRAG requests comments on its Draft Endorsement Advice on IFRS 17 Insurance Contracts as resulting from the June 2020 Amendments

EFRAG is consulting on both its assessment of IFRS 17 against the technical criteria in the EU and on its assessment of whether IFRS 17 is conducive to the European public good. Comments are requeste​d by 29 January​ 2021.


EFRAG has issued a draft endorsement advice letter and a separate invitation to comment relating to the endorsement for use in the EU of IFRS 17 Insurance Contracts as resulting from the June 2020 Amendments ('IFRS 17' or 'the Standard').

IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the Standard. The objective of​ IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts.

IFRS 17 shall be applied for annual reporting periods on or after 1 January 2023. If an entity applies IFRS 17 earlier, it shall disclose that fact. Early application is permitted for entities that apply IFRS 9 Financial Instruments on or before the date of initial application of IFRS 17.

EFRAG's overall preliminary assessment is reported below:

  • The EFRAG Board has concluded on a consensus basis that, apart from the requirement to apply annual cohorts to intergenerationally-mutualised and cash-flow matched contracts, all the other requirements of IFRS 17, on balance (i) meet the qualitative characteristics of relevance, reliability, comparability and understandability required to support economic decisions and the assessment of stewardship, raise no issues regarding prudent accounting, and that they are not contrary to the true and fair view principle; and (ii) are conducive to the European public good;

  • Solely with reference to the requirement to apply annual cohorts to intergenerationally-mutualised and cash-flow matched contracts, EFRAG Board members do not have a consensus. Nine EFRAG Board members believe that the annual cohorts requirement meets the above endorsement criteria, whereas seven EFRAG Board members believe it does not.

The draft endorsement advice provides preliminary conclusions on a number of specific issues that the European Commission and/or the European Parliament considered in their request for endorsement of IFRS 17.

EFRAG is seeking comments on all aspects of its analyses supporting its preliminary conclusions.

EFRAG's draft endorsement advice package consists of the following:

  1. Cover Letter;
  2. Appendix I (description of the requirements in IFRS 17);
  3. Appendix II (DEA assessment and conclusion about the qualitative technical characteristics of all the other requirements in IFRS 17 - apart from the requirement covered in Annex 1);
  4. Appendix III(DEA assessment and conclusion about European Public Good on all the other requirements in IFRS 17 - apart from the requirement covered in Annex 1); and​
  5. Annex 1 (observations about the use of annual cohorts to intergenerationally mutualised and cash-flow matched contracts that are relevant for the DEA assessment of topics usually presented in Appendices II and III).

You are asked to provide your comments on the draft endorsement advice package by downloading the Invitation to Comment, filling in the comments, and submitting the response by clicking on the 'Comment publication' link below.

As background to the draft endorsement advice package, supporting documents can be found on EFRAG's website here.

Comments are requested by 29 January 2021.

For your information, EFRAG has also updated its Endorseme​nt Status Report, which is available here.