CMA urges insurers to gear up for IFRS 17 implementation

Women’s Day in October is a highlight in which 20 customers will be rewarded with RO 5,000 each. On the occasion of the Sultanate’s 48th National Day, a special draw will be held offering RO 3,000 each for 48 winners.

Reaching out with a powerful call for savings, Bank Muscat is committed to promoting the concept of savings among all strata of society. Guaranteeing more for everyone to share, Oman’s flagship al Mazyona savings scheme offers the biggest RO 10 million prize money in Oman and the region.

For over 25 years, al Mazyona has rewarded numerous customers and enriched their lives. The bank encourages everyone to save for the future. Big prize money is not the only attraction of al Mazyona, which is designed to transform the lives of prudent savers. The Capital Market Authority (CMA) has issued a circular to all insurance companies, as well as Oman Reinsurance Company, urging them to prepare for implementation of IFRS 17. The circular features steps to be taken to be ready for the new accounting standard to be fully implemented in 2021.

A workshop held last May introduced insurance and reinsurance companies to the latest accounting practices in financial reporting, unveiled by the International Accounting Standards Board (ISSB) in May 2017. The new standard will replace IFRS 4.

The circular prescribed a threestage process for the assimilation of IFRS17 in insurance contracts. In the first phase, companies are called upon to conduct a gap analysis in respect of the financial and operational impact in the implementation of IFRS 17 instead of IFRS 4. The report on the gap analysis is to be submitted to CMA. This phase will run from September to end-december 2018.

The second phase relates to the design of internal rules and processes to cope with IFRS 17 with regard to accounts, statements and other requirements. It includes the development of a detailed plan with timelines for its implementation. This phase runs from January to December 2019.

The third phase includes the commencement of the empirical implementation of IFRS 17 “Insurance Contracts” and evaluation of the results. Implementation will be in parallel with the existing system with evaluation of the impact of implementation. Implementation is envisioned throughout 2020.

The object of IFRS 17 is to provide unified standards for accounting of all insurance contracts including reinsurance contracts, allowing comparability for the benefit of investors and insurers. The new standard will assist investors and users and analysts of financial statements understand accounting treatment of insurance contracts and the risks insurance companies are exposed to and their impact on the profitability and financial position of such companies and enhances the comparability of financial reports among the companies and financial markets around the world. Such comparisons will ease merger and acquisition activities and enhance competition to attract capital investments and boost investors’ confidence.

The grand yearend prizes totalling RO 900,000 will be shared by seven winners, including the mega RO 500,000 prize for asalah Priority banking customers. THE OBJECT OF IFRS 17 IS TO PROVIDE UNIFIED STANDARDS FOR ACCOUNTING OF ALL INSURANCE CONTRACTS INCLUDING REINSURANCE CONTRACTS, ALLOWING COMPARABILITY FOR THE BENEFIT OF INVESTORS AND INSURERS.