ИМПЛИКАЦИЈЕ ПРИМЕНЕ МСФИ 17 НА ФИНАНСИЈСКУ СТАБИЛНОСТ ДРУШТАВА ЗА ОСИГУРАЊЕ
IMPLICATIONS OF IFRS 17 ON THE FINANCIAL STABILITY OF INSURANCE COMPANIES

Author(s): Jelena Stanković, Evica Petrović
Subject(s): Financial Markets, Accounting - Business Administration, EU-Legislation
Published by: Savez računovođa i revizora Republike Srpske
Keywords: insurance; IFRS 17; Solvency II; financial stability; EU;
Summary/Abstract: The impact of the insurance sector’s operating and investment activities on global economic flows is being re-examined especially after the global financial crisis. The regulatory bodies of the European Union in the field of finance, in particular the European Insurance and Occupational Pensions Authority (EIOPA) and the European Systemic Risk Board (ESRB), have undertaken significant activities in order to identify systemic risk factors originating from the insurance sector. As a necessary prerequisite for making informed decisions, which discourage insurance companies from engaging in risky behaviours and transactions, the transparency of financial reports is emphasized. The new standard - IFRS 17 “Insurance Contracts”, aims to establish a comprehensive and consistent accounting model for insurance contracts, especially for international insurance companies. Accordingly, this standard is expected to provide better insight into the business models of insurance companies and the risk-based measurement of insurers’ liabilities. However, the parallel use of accounting and regulatory standards in the insurance sector led to the need for assessment of the first effects of IFRS 17 implementation, as well as its compliance with the regulatory framework Solvency II. The first results show that there is a significant level of alignment between these two frameworks, but certain differences in the requirements for the calculation of cash flow key elements can significantly affect the presented financial results of insurance companies’ operations.

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