Accounting Alerts

Application of PFRS 17 (Insurance contracts) to the Audited Financial Statements and Reportorial Requirements of the Insurance Commission

This Accounting Alert is issued to circulate Insurance Commission (IC) Circular Letter No. 2024-04 dated March 1, 2024.

Application of PFRS 17

All companies shall apply PFRS 17 to their audited financial statements (AFS) effective January 1, 2025. However, companies may opt to adopt PFRS 17 in the preparation of their AFS starting January 1, 2023.

Disclosure requirements

Disclosure requirements to be presented in a separate supplemental report to the financial statements, covering the insurance and reinsurance asset (liability) items subject to admittance requirements of the Amended Insurance Code, for the following:

1. Companies that will adopt PFRS 17 starting January 1, 2023

a. Non-life and professional reinsurance companies

i. Premiums due and uncollected

ii. Amounts recoverable from reinsurers;

iii. Funds held by ceding companies; and

iv. Funds held for reinsurers.

b. Life insurance companies

i. Premiums due and uncollected

ii. Amounts recoverable from reinsurers;

iii. Funds held by ceding companies;

iv. Funds held for reinsurers;

v. Policy loans; and

vi. Segregated fund assets and liabilities.

2. Companies that will not early adopt PFRS 17

  • Non-early adopters must disclose in the notes to the financial statements the disclosure requirements of Philippine Accounting Standard 8 - Accounting Policies, Changes in Accounting Estimates, and Errors as regards the impending adoption of new accounting standards (e.g. PFRS 17) for the years ending December 31, 2023 and 2024.
  • Once PFRS 17 is implemented, they shall be required to provide IC-specific disclosures to be presented in a separate supplemental report to the financial statements as mentioned above.

Please see attached circular for further details.