Will the IASB’s amended insurance contracts standard be accepted in the EU?

In Europe, there is a legal process for the adoption of international standards into law, and one of the key steps in this process is that the EFRAG, adviser on financial reporting issues to the EC, provides a formal opinion on whether a standard meets certain legally defined criteria. An essential part of this process is that, before finalising its position, EFRAG publishes its advice as a draft on which its European stakeholders are invited to provide their comments. The draft advice for IFRS 17 has recently been published following difficult discussions between EFRAG Board members. The evidence suggests that the future of the standard in Europe is by no means certain – at least not in the form published by the IASB. This article reviews the draft advice to take stock of EFRAG’s position, and to consider how the situation is likely to evolve. The final outcome of these debates could have consequences for the application of IFRS in Europe that go far beyond the insurance industry.