Monday, 29 July, 2013: The UK Financial Reporting Council (FRC) has today issued an Exposure Draft of FRS 103 Insurance Contracts for public comment.
In 2012 and 2013 the FRC revised financial reporting standards in the United Kingdom and Republic of Ireland, replacing almost all extant standards with three Financial Reporting Standards:
- FRS 100 Application of Financial Reporting Requirements;
- FRS 101 Reduced Disclosure Framework; and
- FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
This Exposure Draft proposes that a fourth standard, FRS 103 Insurance Contracts, is added to the suite of accounting standards.
If ultimately issued, this proposed FRS would be relevant to entities applying FRS 102 that have insurance contracts. It aims to provide entities with a single source of financial reporting requirements for insurance contracts. It is based on the International Accounting Standards Board’s (IASB) IFRS 4 Insurance Contracts and also consolidates many of the requirements of FRS 27 Life Assurance and elements of the Association of British Insurers’ Statement of Recommended Practice on Accounting for Insurance Business (the ABI SORP).
The FRC has set a consultation period to run until 31 October, 2013. It is proposed that the new FRS would be effective for accounting periods beginning on or after 1 January 2015. As the proposed FRS will apply to any Irish entity using UK/Irish GAAP and having insurance contracts, IAASA encourages stakeholders to respond to the Consultation Paper.
Pursuant to its statutory mandate to cooperate in the development of accounting standards, IAASA has observer status at meetings of the Accounting Council of the FRC. IAASA also worked, in conjunction with the Institute of Chartered Accountants in Ireland, on drafting the Irish legal references required for the new standards and other such text. The Consultation Paper can be accessed here.