Insurers have been looking at getting ready for the technology requirements of the International Financial Reporting Standards (IFRS) for a while now. However, considering that the U.S. Securities and Exchange Commission has not moved to a specific road map, companies probably won't be required to use to the IFRS promulgated by the International Accounting Standards Board (IASB) until sometime close to 2020.
While there's not going to be an immediate full-bore revision and changeover to IFRS as a single standard of accounting with the elimination of U.S. Generally Accepted Accounting Principles (GAAP), there are other projects underway that are extremely important to the insurance industry. For instance, about a year ago when we were , as we were heading into the financial crisis, both the Financial Accounting Standards Board (FASB) and the IASB , encouraged by the G20 Finance Ministers, decided to move forward to completely revise the accounting for financial instruments. Probably by about 2011, insurers will have to conform to a completely new set of financial instrument standards -- an extremely complex and time consuming effort because it affects practically every system and process.
While companies might not immediately have to worry about IFRS, they do have to worry about the U.S. GAAP. And it might be more efficient to lease accounting systems or equipment since companies will likely have to change it all again two years later as standard setters move on revenue Recognition and financial statement presentation.
The current deadline for all of this is 2011. Insurers -- and their IT organizations -- will need to look at how they will pull their reports on international business into their U.S. reports and determine what their consolidated statements will look like.