Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what assessment they have made of (1) the effects of IFRS 17 on the profits of the inherited estate of insurance companies, and (2) the reported remarks by Peter Drummond that IFRS 17 allows profits to be recognised in the accounts of insurance companies before the shareholders are entitled to those profits, and that this estate may amount to £30bn for the three main insurers.

The UK Endorsement Board (UKEB) is in the process of assessing IFRS 17 for use in the UK. The criteria for their assessment is set out in The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 No. 685. The UKEB is expected to publish its draft Endorsement Criteria Assessment for public consultation, shortly. This draft assessment is expected to include consideration of the effects of IFRS 17 on the profits of inherited estates of insurance companies.

Peter Drummond fed back the views that had been received by the FRC in discussions on the IFRS standard. The ‘reported remarks’ do not reflect the view of the UKEB Secretariat or the UKEB Board but of certain stakeholders; such views have been considered by the UKEB along with other evidence. The outcome of this consideration will be set out in the draft Endorsement Criteria Assessment, when it is issued for public consultation.