EFRAG asks the European Commission to delay the IFRS 17 annual cohort exemption review
EFRAG has written to the European Commission recommending the postponement of its review of the exemption from the annual cohort requirement under IFRS 17 Insurance Contracts until the IASB completes its post-implementation review (PIR).
The exemption, introduced through an amendment to Regulation (EC) No 1126/2008 in November 2021, permits EU insurers to depart from the IFRS 17 requirement to group contracts into annual cohorts for intergenerationally-mutualised and cash flow matched contracts. The regulation requires the European Commission to review the exemption by 31 December 2027, taking into account the IASB’s PIR of IFRS 17.
With discussions within the IASB on when to start the PIR expected to begin only in the fourth quarter of 2026, the IASB is unlikely to complete its PIR sufficiently in advance of 31 December 2027 to allow the European Commission to properly consider its findings.
Due to its wide use across the European Union and European Economic Area, EFRAG considers that amending or removing the exemption before the completion of the IASB’s IFRS 17 PIR could result in unnecessary disruption and significant costs for insurers.