Local firms likely to miss out on deadline for new insurance rules

Kenya is likely to be left behind in implementing the new global insurance regulations. [Photo: Courtesy]

Kenya is likely to be left behind in implementing the new global insurance regulations even as the industry pushes for extension of the January 1, 2021 deadline.

At a forum organized by industry players to track the status of implementation of the IFRS 17 regulations in Nairobi on Tuesday, it emerged that Kenya is among the countries in sub-Saharan Africa that are yet to come to terms with the new financial reporting standards.

This has prompted the sector players to ask for an extension of the deadline for the impending deadline.

“There are only 545 working days left until January 1, 2021, when the IFRS 17 regulations come into effect, yet even the insurance ready leaders such as Korea, Australia, New Zealand and the United States are just at 44 per cent in terms of their level of implementation,” revealed Martin Sarjeant, an IFRS17 expert.

He said many parts of the world were likely to be overtaken by events to their own detriment should they continue to lag behind in the process of implementation.

Shady practices

IFRS 17 is an international financial reporting standard that was issued by the International Accounting Standards Board in May 2017.

The new standard will replace IFRS 4 which will see radical changes in accounting for insurance contracts.

However, Mr Sarjeant said all is not lost and the local industry can still make up for lost time should it change its attitude towards the new regulations expected to introduce sweeping changes to the sector known for its unleveled playing field and shady business practices.

“Kenya will also do well to keep an open mind and go for the solutions already available in the market to ensure compliance to requirements of the IFRS 17 by the set deadline,” he added.

Kenya Reinsurance Corporation (Kenya Re) Managing Director Jadiah Mwarania said Kenya has no choice but to comply with the new accounting regulations, adding that the benefits far outweighed the disadvantages.

“Besides, we have what it takes to implement the regulations that come with benefits that serve to cater to the interests of all concerned stakeholders,” added Mr Mwarania.

Optimize performance

“For example with the high level of transparency and accountability it entails, the IFRS17 standards ensure that shareholders will able to keep tabs on how their companies are performing, even as the players are able to optimize performance,” he explained.