New accounting standard – AASB 17 Insurance contracts
APRA is requesting feedback on its planned approach to integrating AASB 17 Insurance contracts into the capital and reporting frameworks applicable to life insurers and general insurers.
AASB 17 Insurance Contracts (AASB 17) establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts. The requirements are designed to help users of financial statements better understand an insurer’s exposure, profitability and financial position and will facilitate comparison across similar insurance companies. AASB 17 is the direct result of implementing the equivalent International Financial Reporting Standard (IFRS) 17 in Australia. AASB 17 is effective from 1 January 2023 and early adoption is permitted.
APRA’s prudential capital and reporting framework is based on the existing accounting treatment. The introduction of AASB 17 will both modify a number of accounting concepts which underpin APRA’s prudential framework and introduce some new concepts. Through stakeholder feedback, insurers have expressed a strong desire for early direction from APRA on how the capital and reporting frameworks are likely to change as a result of AASB 17.
On 6 June 2023, APRA released a response to consultation on minor amendments to 24 reporting standards for insurers, impacted by the introduction of AASB 17.
APRA consulted on 14 general insurance, 5 life insurance and 5 private health insurance reporting standards.
The response letter and finalised reporting standards can be found at: Round five - Minor amendments to the finalised capital and reporting framework for insurers.
On 4 May 2023, APRA released for consultation minor amendments to the finalised reporting standards for insurers, impacted by the introduction of the Australian Accounting Standards Board 17 Insurance Contracts (AASB 17).
The letter to industry, clean and marked up versions of the general and life insurance reporting standards can be found at: Round five - Minor amendments to the finalised capital and reporting framework for insurers.
On 27 September 2022, APRA finalised changes to the capital and reporting frameworks for insurance in response to the introduction of the new accounting standard Australian Accounting Standards Board 17 Insurance Contracts (AASB 17).
The revised prudential and reporting standards will come into effect from 1 July 2023.
The information paper, response paper, final prudential and reporting standards and non-confidential submissions can be found at: Round four – Response Paper and Final Standards - Finalisation of the integration of AASB 17 into the capital and reporting frameworks for insurers and updates to the LAGIC framework
On 6 April 2022, APRA released additional draft life and general insurance reporting standards impacted by the introduction of the Australian Accounting Standards Board 17 Insurance Contracts (AASB 17), and further revisions to the private health insurer (PHI) reporting standards.
Written submissions are requested by 3 June 2022.
The letter to industry is available below and the corresponding updated reporting standards can be found at:
- Round three – Response Paper and Draft Standards - Integrating AASB 17 into the capital and reporting framework for insurers and updates to the LAGIC framework
- Review of the private health insurance capital framework.
On 13 December 2021, APRA released draft standards setting out the integration of AASB 17 and updates to the LAGIC framework into the prudential and reporting framework for a third round of consultation. The accompanying response paper sets out APRA’s response to stakeholder feedback on the discussion paper proposals released in November 2020.
Written submissions are requested by 31 March 2022.
The response paper, information paper, draft prudential and reporting standards, Quantitative Impact Study and non-confidential submissions to the November 2020 discussion paper consultation can be found below at: Round three – Response Paper and Draft Standards - Integrating AASB 17 into the capital and reporting framework for insurers and updates to the LAGIC framework.
On 25 November 2020, APRA released a discussion paper setting out its proposals on the integration of AASB 17 into the capital and accounting frameworks. The discussion paper also outlines a number of proposed updates to the LAGIC framework to ensure it remains fit for purpose.
Note on submissions
It is APRA's policy to publish all submissions on the APRA website unless the respondent specifically tells APRA in writing that all or part of the submission is to remain confidential. An automatically generated confidentiality statement in an email does not satisfy this purpose. If you would like only part of your submission to be confidential, you should provide this information marked as 'confidential' in a separate attachment.
Submissions may be the subject of a request for access made under the Freedom of Information Act 1982 (FOIA). APRA will determine such requests, if any, in accordance with the provisions of the FOIA. Information in the submission about any APRA-regulated entity that is not in the public domain and that is identified as confidential will be protected by section 56 of the Australian Prudential Regulation Authority Act 1998 and will therefore be exempt from production under the FOIA.