Manila—On July 3, 2018, the MBA technical working group and sub-working groups met with the Insurance Commission to lobby for the exemption of Mi-MBAs in the implementation and adoption of the International Financial Reporting Standard 17 (IFRS 17). Toward understanding the new standards, the Mi-MBAs, their representatives, the secretariat and the Financial & Risk Review Committee (FRRC) had several learning sessions on the IFRS 17. On June 21, 2018, the FRRC recommended to seek exemption of the Mi-MBA sector to both SEC and IC on the implementation of IFRS 17, namely for the following reasons:
- The adoption of IFRS 17 has no clear value added to the governance, management and operations of Mi-MBAs. The association’s current actuarial and financial valuation of revenues and liabilities were deemed effective and straightforward.
- Mi-MBA’s insurance contracts by nature are annually renewable and because of this there is no need to undergo IFRS 17’s rigorous revenue recognition process.
- On a more practical view, IFRS 17’s is mainly utilized by investors and analysts, and it will not be relevant to the Mi-MBA sector stakeholders.
The International Accounting Standards Board (IASB) issued IFRS 17 ‘Insurance Contracts’ on May 2017. IFRS 17 requires that a company should apply in reporting information the insurance contracts it issues and the reinsurance contracts it holds. This would replace the IFRS 4 on accounting for insurance contracts.