Accounting is a pertinent topic for all insurance companies and therefore also for AMICE’s membership, cooperative and mutual insurers. According to IAS Regulation (EC) 1606/2002, all listed companies registered in Europe are obliged to apply the International Financial Reporting Standards (IFRS, formerly IAS) for their consolidated financial statements since 2005.

As entities that are not listed (unless they have issued debentures that are admitted to trading on a regulated market), mutual and cooperative insurers are not immediately concerned by this Regulation. Some Member States, however, took the option of extending the requirements of the IAS (= IFRS) Regulation to solo accounts and/or to unlisted undertakings. Therefore, some mutual and cooperative insurers are therefore already now (voluntarily or on the basis of national legislation) applying the IFRS; many others are getting ready to do so in the future. A recent overview of the current requirements as to the application of the IFRS by each Member State can be downloaded from the respective Commission website.

Moreover, the introduction of Solvency II, where the initial balance sheet which is needed to calculate the SCR is, in principle, based on IFRS, makes it even more necessary to monitor these accounting standards.

The IFRS are drafted by the International Accounting Standards Board (IASB), an independent international body headquartered in London, charged with developing a single set of high quality, global accounting standards. The IASB is currently working on phase 2 of a project to develop an IFRS for insurance contracts. An exposure draft was published on 30 July and comments are expected by 30 November. The final standard is expected in 2011.

The European Commission’s responsibility is to endorse the standards (i.e. accepting them for integration into European law) after seeking advice from EFRAG, the European Financial Reporting Advisory Group, and the Accounting Regulatory Committee (ARC), which is composed of representatives of Member States. AMICE holds an observer seat at the Insurance Accounting Working Group of EFRAG.

Within AMICE, the work on IFRS is carried out in the IFRS task force of the Economic and Finance working group. One of the main elements of the task force’s remit will be the IASB exposure draft on insurance contracts as well as financial instruments. The accounting task force cooperates, where appropriate, with CEA.

Finally, it should be noted that all work on accounting by insurance undertakings is also closely connected to the Solvency II project, particularly in the context of the valuation of assets and liabilities (pillar I) and reporting (pillar III).