Accounting standards and insurer solvency assessment

FSI Insights  |  No 26  | 
31 July 2020
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 |  38 pages

The paper explores the use of accounting standards for insurer solvency assessment in the context of the implementation of IFRS 17. The paper is based on the results of a survey of 20 insurance supervisors.  Overall, IFRS 17 is a welcome development but there will be challenges of implementation.  Not many insurance supervisors intend to use IFRS 17 as a basis for solvency assessment of insurers. Perceived shortcomings can be addressed by supervisors providing specification where the principles-based standard allows a range of approaches. Accounting standards can provide a ready-made valuation framework for supervisors developing new solvency frameworks. 

JEL classification: G22, M41, M48

The publication is also available on the website of the International Monetary Fund (IMF) as Working Paper WP/20/146 Accounting Standards and Insurer Solvency Assessment.