NAICOM inaugurates IIFR Working Group for adoption of IFRS 17 by 2022

The National Insurance Commission (NAICOM) on Monday inaugurated the Insurance Industry Financial Reporting Working Group(IIFRWG) in Lagos.
The inauguration is to prepare for a seamless adoption of the International Financial Reporting Standard (IFRS )17 in Nigeria by 2022.
Mr Sunday Thomas, Acting Commissioner for Insurance, while inaugurating the group, said it was important because all insurance and reinsurance contracts must be reported in accordance with IFRS 17 from Jan. 1, 2022.
He said that the IFRS 17 Insurance contracts establish the principles for the
recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard.
” The IIFRWG is an advisory and consultative team being constituted by NAICOM for the purpose of a seamless adoption of IFRS 17 in Nigeria.
“In May 2017, the International Accounting Standard Board (IASB) issued the IFRS 17 Insurance contract to replace the present IFRS 4 on accounting for insurance contracts by January 1, 2022.
” The objective of IFRS 17 is to ensure that an entity provides relevant information that
faithfully represents those contracts,” he said.
According to him, the information gives a 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.
He noted that the IFRS 17 is more than an accounting issue and insurers will need to think holistically about the impact on their organisations.
Thomas said the standard would have significant implications on the Information Technology systems, strategic management, business processes, actuarial services, treasury and employee skills of the insurance companies.
“In all of these, there are a lot of challenges that will be faced by the insurers.
“Transition is going to be comprehensive and complex, but developing business plan before the effective date will affect key areas in the operational processes,” he said.
The Acting Commissioner said if the effective date of implementation is not shifted again, it means that Nigeria has only one year to prepare for the adoption of the IFRS 17.
He stated that the commission had issued the “Roadmap on Adoption of IFRS 17 Insurance Contract for insurance industry in Nigeria” on Jan. 28, 2020.
Thomas said that the activities and timelines in the roadmap were intended to set the tone and facilitate a coordinated process and action steps.
He said : ” the roadmap was issued for general adoption by all Insurance, Reinsurance, Takaful and Micro Insurance Companies in Nigeria.
“The Working Group should be guided by the roadmap in the execution of its mandates”.
According to him, the Working Group consists of members with relevant expertise and experience of insurance business, its accounting as well as financial instrument.
Thomas said that the IIFRWG was expected to support the commission in providing technical advice on the adoption of IFRS 17 Insurance Contract and IFRS Interpretations on insurance specific matters and their application within Nigeria.
He said the Working Group would, among other functions, discuss technical assessment and interpretation issues arising from IFRS 17 and consider consistent application within the Nigerian insurance industry.
Thomas said that the Working Group was advisory in nature and its output would always take the form of recommendation to the commission.
He said it must also support the commission’s role to the industry and all those involved in the insurance financial reporting value chain.
The acting commissioner assured that the commission would give its full support to the Working Group to facilitate its work and help it in achieving the set goals.
“I wish members of the Working Group success as we work together to overcome challenges in the adoption of the IFRS 17,” he said.
In his acceptance speech, Mr Barineka Thompson, Director of Inspectorate, NAICOM, and Chairman of the Group, lauded the commission for putting it together, saying it would be the “Think Tank Consultative group “.
Thompson urged members of the group to be committed, promising to deliver on the mandate given.
He said that the group was expected to design a coordinated approach to financial reporting in terms of the time frame to adopt the IFRS 17 before the deadline.
Mrs Yetunde Ilori, Director General, Nigeria Association of Insurance (NIA) lauded NAICOM for the initiative and commended it for carrying the operators along from its conception.
Ilori charged members of the group to be committed and ensure that they deliver on their mandate.