Transition Resource Group (‘TRG’) continues discussions on IFRS 17 implementation

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In transition , PwC US Apr 05, 2019

In its latest meeting the TRG debated the definition, separation and measurement of an investment component in IFRS 17 and provided feedback on other submissions received.


At its half day meeting on April 4, 2019, the TRG for IFRS 17 continued the discussion on implementation issues. The IASB has received 127 submissions in total, 46 of which were considered in this meeting.

The TRG discussed one detailed agenda paper on investment components (covering 3 submissions). The IASB staff noted that they will propose an amendment to the definition of investment component as part of the proposed annual improvements, to be discussed at the April 2019 Board meeting. Many TRG members observed that the proposed revised definition of an investment component as an amount that the insurance contract requires the entity to repay to the policyholder in all circumstances was a helpful clarification. The staff noted that while investment components were in some cases obvious (e.g. explicit cash surrender values and account balances), in other cases, such as certain European whole life contracts and payout annuities, the amounts were implicit. In addition, for some contracts, the return of amounts to policyholders represented the refund of unearned premium rather than an investment component. The TRG observed that there might be challenges in distinguishing the amount that is a repayment of premium from an investment component, and the IASB staff will consider these concerns further.

There were 43 other submissions not meeting the submission criteria. The TRG members provided feedback on some of these, particularly the treatment of inflation assumptions, the eligibility test for the variable fee approach, and consideration of reinsurance contracts in the determination of the risk adjustment.

The IASB has not scheduled any further TRG meetings. The chair noted that he sees a continuation of the trend noted at the September 2018 TRG in that the submissions received are more narrow and relate to specific fact patterns thus not meeting the criteria for discussion. Therefore, to avoid further disruption in implementation of IFRS 17, no further TRG meetings are scheduled. However, the staff noted that submissions can continue to be made to the TRG mail box.

The views in this document are based on our observations from the meeting, and might differ in some respects from the official summary of the meeting to be published by the IASB at a later date.

To have a deeper discussion, contact:

Donald Doran

Partner, National Professional Services Group, PwC US


Marie Kling

Partner, National Professional Service Group, PwC US


Mary Saslow

Managing Director, National Professional Service Group, PwC US


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Matt Adams

US Insurance Practice Leader, PwC US

David Schenck

US Insurance Tax Leader , PwC US

Richard de Haan

Global Actuarial Leader, PwC US

Mary Saslow

Managing Director, National Professional Service Group, PwC US

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