Insurance companies and reinsurers have until January 1, 2027, to adopt the Philippine Financial Reporting Standard 17–Insurance Contracts (PFRS 17) in their audited financial statements, the Insurance Commission (IC) said.
According to the IC’s statement yesterday, the new accounting standard introduces a more uniform and transparent approach to determine insurance contract liabilities using current values and risk adjustments.
“The Commission views that the eventual institutionalization of PFRS 17 will ensure prudential stability and sustainable growth. It will also consequently afford the insuring public sustained, if not increased, protection and confidence,” Insurance Commissioner Reynaldo Regalado said.
According to the IC, the adoption of the PFRS 17 was initially deferred from January 1, 2023, to January 1, 2025.
However, the IC issued Circular Letter No. 2025-04 stating that due to gaps in the insurance industry’s preparation for PFRS 17 and the need for additional time for a smooth transition, the new effectivity date is January 1, 2027.
“The Commission recognizes the need by insurers and reinsurers for additional time to prepare for the adoption of PFRS 17 in the presentation of their solvency reports,” Regalado said.
This will also allow the IC, Securities and Exchange Commission, Financial and Sustainability Reporting Standards Council and the Professional Regulatory Board of Accountancy more time to ensure the effective, proportionate and well-coordinated adoption of the new accounting framework, he added.
Regalado, however, said insurers and reinsurers are not precluded from adopting PFRS 17 as early as this year.
In May 2017, the International Accounting Standards Board prescribed the International Financial Reporting Standards (IFRS) 17 for insurance contracts, providing for principles for the recognition, measurement, presentation and disclosure of issued insurance contracts in financial statements.
In 2018, the local adoption of IFRS 17 as PFRS 17 was approved, the IC said.
The new circular letter provides that insurers and reinsurers shall submit reports outlining the status of their implementation of PFRS 17 and affidavits of undertaking, which serve as formal declarations of the companies’ commitments to implement the new accounting standard.
Quarterly PFRS 17 implementation status reports shall also be submitted, indicating the preparatory activities undertaken; an overview of implementation risks, challenges and issues encountered; an assessment of PFRS 17 preparedness; and the companies’ PFRS 17 accounting policies.
