The Philippine Insurance Commission (IC) has announced that the adoption of the Philippine Financial Reporting Standard 17 (PFRS 17), which pertains to insurance contracts, will be mandatory for all insurers and professional reinsurers beginning January 1, 2027. This standard aligns with the International Financial Reporting Standard (IFRS 17), introduced by the International Accounting Standards Board in 2017.
PFRS 17 requires insurers to adopt a more consistent and transparent approach to determining insurance contract liabilities. The new regulation is expected to bring significant changes to the way insurance companies report their financials, enhancing comparability and clarity for stakeholders.
Insurance Commissioner Reynaldo A. Regalado emphasized that the transition to the new standard will require additional time for insurers and reinsurers to prepare adequately. The commission aims to facilitate better coordination with key regulatory bodies, including the Securities and Exchange Commission (SEC), the Financial and Sustainability Reporting Standards Council (FSRSC), and the Professional Regulatory Board of Accountancy (PRBA).
While the mandatory adoption date is set for 2027, insurers and reinsurers have the option to begin implementing the new standard before the official deadline.
As part of the preparation process, insurers and reinsurers must submit their implementation status reports and affidavits of undertaking with their 2024 Annual Statements. These documents are due by April 30, 2025.
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