By Tony Obiechina, Abuja
The National Insurance Commission (NAICOM) has inaugurated Special Sub Working Groups (SWGs) of the Insurance Industry Financial Reporting Working Group (IIFRWG).
Commissioner for Insurance, Mr Sunday Thomas, who inaugurated the group on Monday said that the SWG was expected to provide guidance to the IIFRWG for the seamless adoption of the International Financial Reporting Standard ( IFRS) 17.
According to him, the IFRS 17 which would take effect from January 2023 by the Nigerian insurance companinies was constituted to help foster the country’s adoption of the IFRS 17 in line with best practices.
The commissioner noted that the commission had equally issued a ‘roadmap’ on the adoption of the IFRS 17 insurance contract for insurance industry in Nigeria since January 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,” he said.
Thomas also stated that the SWGs were constituted to assist the IIFRWG in the achievement of its mandate and ensure seamless transition to the IFRS 17.
He said that the IIFRWG had identified the following three critical sub working groups namely : accounting, disclosure and reporting Sub -Working Group. This he said, would assist on technical issues relating to accounting.
According to the commissioner, members of the various SWGs comprises selected members of the IIFRWG and the co-opted members selected from the relevant organisations.
He explained that membership of each of the SWG was selected based on a member area of strength in terms of knowledge and experience noting that the aim of constituting the group was to ensure that the views from Nigerian stakeholders interested in insurance financial reporting issues were properly considered in discussions at the SWG.
He assured that the commission would continue to give its full support to the SWGs to achieved the set goals.
The IIFRWG which was an initiative of the commission was inaugurated in March 2020 as an advisory and consultative team of experts for the purpose of seamless adoption of the IFRS 17 in Nigeria.It was in line with the commission’s strategic goal to facilitate transparency and accountability in financial reporting.In May 2017,
The International Accounting Standard Board issued the IFRS 17 insurance contract, which would replace the present IFRS 4 on accounting for insurance contracts effective January 2023.
The objective was 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.
The terms of reference of the committee include:
*Responsible for setting up minimum disclosure requirements and financial
report templates;
*Responsible for providing broad guidelines on: standards interpretation, divergence of views arising, practical implementation issues arising, implications of accounting and actuarial policy options that may be
selected and Suggestions on structure of target operating models, Non-compliant practices that have been noticed etc.
Actuarial Systems and Data Working Group
Responsible for preparing the functional and technical specifications from the
methodology and requirements papers
2 Define minimum data requirements and groupings for IFRS 17 related actuarial measurements.
Responsible for developing minimum standards and specifications for actuarial systems
Develop and recommend standardised principles for assumption settings on
the following issues; lapse, future expense, risk adjustment, discount rates, loss rates including mortality, estimates of future cash flows and other incidence rates used in the calculation of Contractual Service Margin (CSM)
