Yemisi Izuora
The National Insurance Commission, NAICOM says intensive stakeholder engagement is ongoing ahead of the 2023 date for transitioning to International Financial Reporting Standard (IFRS) 17.
Oriental News Nigeria, ONN, reports, NAICOM has designed a national road map towards the implementation of the standard in Nigeria and this is broken down in phases into pillars 1 to 5 with pillar 1 having started January 2020.
Commissioner for Insurance Sunday Thomas, who spoke at a Thought Leadership Breakfast Session organised by Pedabo Audit Services in Lagos, said the sector is actively working to align with the transition timeline.
Thomas, who was represented by NAICOM’s Director of Supervision, Barineka Thompson, noted that there was no going back on the implementation of the standard.
Thomas, said the transition remained on track as stakeholders were being engaged, and advised related companies to use the transition phase wisely as the Commission would not tolerate failure and weak implementation by companies.
At the event themed, “An insight into the new IFRS 17 and its impact on the insurance business,” experts raised concerns over the loopholes in Nigeria’s approach and expressed fears that it has many implications for the country, especially the insurance sector.
They said the state of data in the sector, the investment required to acquire data, the security of the data, integrity, storage, and the reliability of the data as well as the complex computation required remain critical if the the initiative will succeed in Nigeria.
While January 1, 2023 is the transition date, the early adoption is permitted by the International Accounting Standard Board (IASB).
Managing Partner, Pedabo, Ajibade Fashina noted that there was the need for auditors to understand the task ahead. He said: “They have a lot of work ahead; talking about financial statements, which would double current figure. That is indeed a huge task ahead of them.
He called for a risk-based approach to ensure control over data, while engaging the modalities for estimates, capacities and competencies of the consultants. “I will advise that auditors should be involved during the transition. This will avoid waste of time during the final audit,” Fashina added.
Senior Manager, Pedabo, Nosa Ogbebor, said there are a lot of estimates, assumptions and issues related to feasible practicalities of the IFRS 17, with participants seeking automation of systems and processes were needed for the success of the implementation.
He noted that data may remain a critical bottleneck, adding that the system architecture in the industry, accounting policies that aid and guide the implementation, capacity development and training remained sacrosanct for a successful implementation.
Ogbebor also raised concerns over the level of investment that could truncate smooth transition, saying that while there were gaps in previous standards, fine-tuning proposed standards remained critical.
While the previous standards had variety of treatments, leading to inconsistencies as well as difficulty of having a consistent approach or framework on treatment for some insurance contracts, he noted that there are more concerns on estimation of cashflows for long contracts.
