On 19 June, the European Parliament’s ECON committee adopted the draft Motion for a Resolution on IFRS 17 ‘Insurance Contracts’. The Question for Oral Answer to the European Commission accompanying the Motion for Resolution was published on the Parliament’s website on 22 June.
Following the EP ECON vote, the secretariat of IE has analysed the final text of the Motion for Resolution. In its reading, the adopted text brings a number of improvements to the original text in line with Insurance Europe’s key messages and comments on the proposed amendments. Specifically, compared with the draft, the adopted text:
- includes a reference to reinsurance and operational impact of the standard in the list of controversial areas already identified by EFRAG (recital G and paragraph 5)
- includes a reference to concerns relating to the expected cost of implementation and complexity of reporting (paragraph 3)
- recommends reviewing the timeframe once the full scale and complexity of the issues identified in the field testing process are understood (paragraph 5)
- removes references to “EFRAG study” (paragraph 9) and “regulatory arbitrage” (paragraph 10)
Although the reference to EIOPA’s role proposed as an amendment is not included in the final text, following the adoption of a compromise amendment, the final text calls on EFRAG to liaise closely with EBA/ESMA. Nevertheless, given that the vote is very much in line with Insurance Europe’s comments, the secretariat considers the outcome satisfactory and a good compromise as the final text includes all key industry concerns .
The ECON Committee Chair communicated the Motion for Resolution as voted by ECON on 19 June to EFRAG on 13 July for consideration in the drafting of the Draft Endorsement Advice (DEA).
Please find the links to the Motion for a Resolution
http://www.europarl.europa.eu/cmsdata/150201/MfR%20IFRS%2017.pdf
and the related Question for oral answer to the Commission
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+OQ+O-2018-000068+0+DOC+XML+V0//SK
Next Steps
- Vote in plenary on EP MfR: October (to be confirmed)