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By Huw Jones
LONDON, Oct 14 (Reuters) - Britain's new body overseeing
accounting rules following Brexit said it was braced for a "lot
of noise" from the 1.7 trillion pound ($2.33 trillion) insurance
sector about measures to increase transparency of financial
positions and performance.
Departure from the European Union meant Britain had to set
up its own body to endorse international accounting rules, a
task previously undertaken by Brussels, with the first big test
next month involving insurance accounting rule IFRS 17.
Pauline Wallace, a 30-year veteran in accounting who is
interim chair of the UK Endorsement Board (UKEB), said the body
will consult in November on endorsing the rule which comes into
force globally in January 2023.
"We are running against quite a tight deadline," Wallace
told Reuters.
The UKEB must take into account the long-term impact of an
accounting rule on the UK economy and its competitiveness
compared with Europe and elsewhere, with government keen for
Britain to bolster its attractiveness as a global investment
centre following Brexit.
IFRS rules are written by the International Accounting
Standards Board (IASB) for use in over 140 jurisdictions and are
endorsed at the national level for use.
IFRS 17 represents one of the biggest changes for insurers
in decades, shining a light into a "black box" of balance sheets
whose opaqueness has put off many investors.
Wallace said the consultation will ask if IFRS 17 should be
applied as written by the IASB, adding that she has not heard
any calls for major 'carve outs'.
"We can also not endorse. That is the nuclear option. I
don't think that's anything anybody wants," Wallace said.
She expects a "lot of noise" from industry, especially over
the treatment of with-profits funds.
"The insurance industry is very good at making their views
known. Insurance companies are not the only stakeholders in
this. Investors are very keen to see better accounting in
insurance," she told Reuters.
The Association of British Insurers said it had no comment
on IFRS 17 at this stage.
Following heavy lobbying from Europe's insurance sector, the
EU is putting some contracts into shorter time brackets, a key
demand from insurers in southern Europe.
Wallace said she was not hearing calls for a similar move in
the UK.
($1 = 0.7291 pounds)
(Reporting by Huw Jones;Editing by Elaine Hardcastle)
