In the episode, Silverman explains why there is a need for an updated global set of accounting standards.
“IFRS 17 is intended to bring more market-related values to the insurance liability numbers and accounts, as well as consistence across territories,” said Silverman. “It is necessary because the current practice, which is IFRS 4, introduced in 2005, actually grandfathered local gaps that were in place then. This means that different accounting standards are actually used in different countries.”
Silverman also addressed how AM Best will use IFRS 17 data in its ratings process, once implemented.
“AM Best will be using the data for its quantitative model; however, we do make adjustments, since we are interested in the economic realities underlying these companies. With the principles-based targeting of market values that IFRS 17 represents, we do anticipate that the adjustments to those numbers will be considerably less than what we do presently,” he said.
To access a copy of this special report, titled, “IFRS 17 – A Welcome Advance. Value Measures in Primary Accounts. Delay was a Necessity”, visit http://www3.ambest.com/bestweek/purchase.asp?record_code=283764.
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AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View AM BestTV episodes at http://www.ambest.tv.
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Source: AM Best