The Insurance Regulatory Authority (IRA) wants to review how a new accounting standard that started in January is going to impact underwriters and find ways of smooth implementation.
The regulator is looking for a consultant to do the job that will rely on the restated financial statements of last year.
Insurance companies in January switched to International Financial Reporting Standard (IFRS) 17 and dropped IFRS 4 which has been in use for about 18 years, forcing them to restate financial statements for last year.
The IRA says the consultant will “conduct an impact assessment on the industry after the submission of the restated 2022 IFRS 17-compliant financial statements.”
The consultant will also review the current general and long-term insurance statutory returns templates and propose amendments to comply with the new standard.
IFRS 17, which guides reporting on insurance contracts, requires a company to measure insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to insurance contracts.
The Association of Kenya Insurers last year trained its members in the new standard, saying that it was working with the IRA to develop industry guidelines to guide in the transition.
“In line with other jurisdictions, this transition is expected to take on average 2.5 to three years,” said AKI then.
The new accounting standard is aimed at injecting transparency in the financial reports, revealing position and risk.
The IRA expects the consultant to align the risk-based capital model with IFRS 17 compliant statutory returns and templates and set out a clear road map for the successful implementation of the new standard.
The review will extend to statutory returns templates used by micro-insurance, general reinsurance, long-term reinsurance and bancassurance intermediaries.