Korea urges firms to calculate contract liabilities from 2021May 19 2017 by InsuranceAsia News Staff
To better cope with the new global accounting rule, insurers in South Korea have been urged to calculate insurance contract liabilities based on current interest rates and provisions from 2021.
Analysts said the new rule will enable a fairer assessment of insurers’ ability to withstand stress but will force them to have more capital bases and reserves to cover potential losses.
The Financial Services Commission said the new rule would encourage insurers to better cope with the IFRS 17, which will take effect from January 2021.
Overall, the new accounting standards are likely to have a positive impact on South Korea life firms.
Credit appraiser Moody’s Investors Services said the new standard would, over time, promote structural improvements and value creation in the industry.
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Group CEO Ng Keng Hooi says the company is in fact considering additional funding to comply with IFRS 17.