Technical Assistance Provided to Uganda on IFRS 17 Implementation

International Accounting Standards Board (IASB) issued International Financial Reporting Standard 17 (IFRS 17) Insurance Contracts in May 2017. The new financial reporting standard replaces IFRS 4 Insurance Contracts with effect from January 2023 and is expected to improve the usefulness, transparency and cross-jurisdictional comparability of insurers’ financial reports.

Owing to the complexity of implementing IFRS 17, the Insurance Regulatory Authority of Uganda (IRA) with the support of the Ministry of Finance, Planning and Economic Development of Uganda requested MEFMI for assistance in developing a framework for the implementation of the standard. In response, MEFMI provided technical assistance to facilitate IFRS 17 implementation in Uganda. The assistance was delivered through two (2) missions. The second mission, which was conducted from 13 September to 10 December 2021, was a sequel to the first one conducted from 7 September 2020 to 5 February 2021.

The objective of the mission was to complete the work begun in 2020 by conducting a review of the data collected from life insurers and developing standard models for IFRS 17 reporting ahead of the adoption of the standard. Specifically, the mission aimed to enhance the participants’ understanding of IFRS 17 and develop standard models for its implementation in Uganda. To achieve this objective, the scope of the mission entailed reviewing financial data submitted by affected entities using the framework developed during the first phase of the assistance. Furthermore, the mission included the development of standard models for IFRS 17 covering the calculation and analysis of profitability, discounted cash flows, risk adjustments, allocation of expenses, premium allocation and impact assessment were developed and shared with IRA and the supervised entities.

The main outputs of the mission were the models and templates that will be used to standardise IFRS 17 reporting across the insurance industry in Uganda. Follow up interventions will be conducted to train the IRA personnel on the models and standards and obtain feedback from the industry on challenges faced in migrating to IFRS 17.

The mission was facilitated by Mr. Tawanda Chituku, an actuarial consultant supported by Mr. Patrick Mutimba and Mr. Noel Mahombera from the MEFMI Secretariat.

Prepared by Noel Mahombera