Deloitte Malta Insurance Accounting Newsletter
Keeping you updated
We are pleased to bring you the Deloitte Malta’s Insurance Newsletter that is intended to highlight the current insurance accounting and regulatory developments that are reshaping the insurance industry in Europe and globally.
We hope that this Newsletter will help you keep abreast with all that is currently happening in the insurance accounting and regulatory world.
Delays and uncertainty
With the constant delays to both the Solvency II and IFRS 4 Phase II timetables and fears that insurers would have little time to respond before the new regulatory and financial reporting regimes came into force, it seemed only a matter of time before the European policymakers would look for a way to postpone the implementation of Solvency II and IFRS 4 Phase II.
It appears likely that full implementation of Solvency II will be delayed by a full year from the European Commission’s already extended deadline of 1 January 2013. Response to this postponement was mixed, with some arguing that a delay would allow for more time to develop the final rules and allow for a smoother transition to the new regime. But others warned of the increased costs that a delay would cause. A potential issue for firms is that a delay to the implementation of Solvency II would mean that Solvency I would still be in force until the end of 2013, which could lead to considerable additional work for insurers. Companies would need to cope with the “double work” involved in meeting Solvency I as well as producing data for Solvency II.
In the last two months we have seen significant setbacks in the efforts of the International Accounting Standards Board and the Financial Accounting Standards board to develop the new insurance accounting standard for both IFRS and US GAAP. The release date for the new insurance IFRS has now been pushed back to the second half of 2012, with re-exposure likely in the next six to eight months, whilst the likely effective date for the new IFRS for insurance contracts will be 1 January 2015.
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