EFRAG

EFRAG considers that the temporary exemption from applying IFRS 9 should be available to all entities that issue material insurance contracts within the scope of IFRS 4 in order to avoid an uneven playing field in the insurance sector. Furthermore, the temporary exemption from applying IFRS 9 should not capture material non-insurance activities, in particular banking activities. Therefore, EFRAG has the view that the temporary exemption from applying IFRS 9 should be available both at and below the reporting entity level.

EFRAG recommends that the temporary exemption from applying IFRS 9 should be based on one of the following approaches:

  • A widened ‘predominant activity’ criterion which is determined on a basis that is not limited to the issuance of contracts within the scope of IFRS 4. However, it would be set at a higher threshold than proposed by the IASB; or
  • A ‘regulated entity’ criterion which considers definitions from regulatory sources.

Finally, EFRAG agrees with the expiry date set for the temporary exemption from applying IFRS 9.

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