Accounting standards and insurer solvency assessment

The paper explores the use of accounting standards for insurer solvency assessment in the context of the implementation of IFRS 17. The paper is based on the results of a survey of 20 insurance supervisors.  Overall, IFRS 17 is a welcome development but there will be challenges of implementation.  Not many insurance supervisors intend to use IFRS 17 as a basis for solvency assessment of insurers. Perceived shortcomings can be addressed by supervisors providing specification where the principles-based standard allows a range of approaches. Accounting standards can provide a ready-made valuation framework for supervisors developing new solvency frameworks. 

JEL classification: G22, M41, M48

The publication is also available on the website of the International Monetary Fund (IMF) as Working Paper WP/20/146 Accounting Standards and Insurer Solvency Assessment.