IFRS 17 accounting metrics should be used for Solvency II prudential requirements to create a single reporting framework similar to that used in the banking sector, IVASS board member, Rita Laura D’Ecclesia, has argued.
Speaking at the IVASS conference this week, D’Ecclesia said this would introduce “simplification” and “reduce compliance costs”.
D’Ecclesia said that although the two frameworks have different objectives, they share important conceptual similarities, and aligning valuation processes where possible can improve understanding of insurers’ risk and economics while lowering implementation costs.
Furthermore, D’Ecclesia said she views IFRS 17 as an informational infrastructure that can inform not only financial reporting but also regulatory oversight and insurers’ internal management decisions.
IFRS 17 should be viewed “not as an end in itself, but as a tool that supports transparency, market discipline, Solvency II prudential rules, insurers’ management decisions, and the stability of the insurance system”, D’Ecclesia concluded.
