Experts during a seminar on Sunday urged insurers to follow international financial reporting standards (IFRS) to play their part in achieving the country's economic goals.
Following the standards would help ensure transparency in the sector and gain people's trust that lags much behind that of the expectations, they also said.
This was observed at a seminar titled "IFRS 17-Insurance Contracts: Overview, Implementation Challenges & Way Forward," organized by the Institute of Chartered Accountants of Bangladesh (ICAB.)
International Financial Reporting Standard or IFRS is a global standard issued by the International Accounting Standards Board (IASB.)
As the premier accountancy body in Bangladesh, ICAB is ready to help insurers and other financial institutions cope with the transition to IFRS 17: Insurance Contracts from the previous standard.
Chairman of Insurance Development and Regulatory Authority (IDRA) Mohammad Jainul Bari attended the seminar as chief guest.
ICAB president Md Shahadat Hossain, ICAB council member and former president Md Humayun Kabir, and vice president Fouzia Haque spoke on the occasion among others.
Partner of Mahfel Huq & Co Wasequl Huq Reagan presented a keynote paper in the seminar.
Bari said the IDRA will pay more attention to the compliance issues of the IFRS 17.
As soon as this standard becomes effective next year, insurance companies in Bangladesh will need to prepare their financial statements in accordance with this standard, he also said.
"We will prepare an action plan to implement the standard as soon as it becomes effective in January next year," the IDRA chairman added.
He sought cooperation of various stakeholders including ICAB and Financial Reporting Council (FRC), Bangladesh to implement the IFRS-17: Insurance Contracts.
The full compliance with the IFRS 17: Insurance Contracts will increase transparency and accountability in the insurance sector of the country and enable companies to gain public trust as well, he added.
The ICAB president said the insurance companies are the largest investors in the financial markets.
"So, the growing linkage between the insurers and the banks is considered as a safeguard of financial stability of the country."
Also, the transparency delivered by accounting standards in this sector is a crucial ingredient for sustainable growth, he added.
The International Accounting Standards Board (IASB) has issued the "IFRS 17: Insurance Contracts" which is going to be effective from January 1, 2023 for annual reporting periods beginning on or after January 1, 2023 with early adoption permitted in certain circumstances.
The keynote presenter said the IFRS 17: Insurance Contracts took 20 years to be issued, highlighting the complexities of the standards and overcoming many challenges posed by the interim standard IFRS 4.
IFRS 17 ensures more transparent and comparable financial statements.
It permits three models for measurement of insurance contracts liability which are building block approach or general measurement model (default model), premium allocation approach (PAA) and variable fee approach (VFA.)
