The international financial reporting standard for insurance contracts adopted in 2017 is IFRS 17.
The International Accounting Standards Board issued IFRS 17 Insurance Contracts on May 18, 2017. It replaced IFRS 4, an interim standard that had allowed insurers using IFRS to continue with widely varied national accounting practices. IFRS 17 was designed to make insurers’ financial positions and performance more comparable across countries and companies.
The standard requires insurers to measure insurance-contract obligations using current estimates of future cash flows, adjusted for risk and the time value of money. It also introduces a contractual service margin, which generally defers recognition of unearned profit and releases it as insurance services are provided. Insurance revenue and insurance-finance results are presented separately.
IFRS 17 is not the same as Solvency II, which is a European prudential and capital-regulation framework. GAAP refers to generally accepted accounting principles, not one single worldwide insurance standard, while IFRS 9 primarily addresses financial instruments. After later amendments, IFRS 17 became effective for annual periods beginning on or after January 1, 2023.