INSURERS SAY NOT READY FOR NEW FINANCIAL RULES
THE Zambian insurance industry has called for a deferment date of implementing the International Financial Reporting Standard (IFRS 17) as it is impossible for the sector to attain 100 percent compliance by the target period of January 1, 2023.
The IFRS 17 is a stringent requirement which brings about disclosures in terms of how the financial reporting by insurance firms is going to be done.
Insurers Association of Zambia (IAZ) president, Moses Siame stressed that the IFRS 17 is a costly venture as entities needed about K500, 000 to set up the project.
But the Pensions and Insurance Authority (PIA) has insisted that there is still time to discuss the challenges before talking about deferment. On the sidelines of the 2023 insurance conference, Mr Siame emphasised that it was not feasible for the insurance firms to be ready for implementation by next year.
“Overall, not much progress has been made and this is why we are saying realistically speaking, there is no chance that all the over 35 insurance companies in Zambia are going to be ready by January 1, 2023.
“It is not possible. The reality is that it will not be done. It will be a good thing to defer from the perspective of IAZ. The readiness is not there so even if we do not defer we will not achieve 100 percent compliance,” he said in an interview.
Mr Siame pointed out that key in the project implementation was the Zambia Institute of Standard Chartered Accounts (ZiCA) which had not yet issued guidelines on how the IFRS 17 would be domesticated.
He also complained that PIA only issued the required guidelines on the IFRS 17 in July 2022 which was also had added to the delay in project implementation.
In response, PIA acting Registrar Namakau Ntini said there was still scope for the industry to engage and to see how best challenges around the IFRS 17 could be resolved.
Ms Ntini said the IFRS 17 provided the industry with more informative financial reporting in terms of the performance of the entities.
“In terms of preparedness, this conversation has been there since 2015 so from a PIA point of view we have reached out to the market and we are working with ZiCA to try and see how best we can help the market
“As much as there could be sentiments that we should quickly defer, perhaps before we get to that point we still have a window where we can sit down and discuss where the challenges are,” Ms Ntini said.
On the delayed issuance of the guidelines, Ms Ntini said: “in terms of the interventions that the authority came in was because we saw that there was a slow take off from industry.