EFRAG Requested Delay for IFRS 17 Accounting Review
Insurers in eight nations should monitor potential changes to annual cohort exemptions for financial reporting.
Updated on Sept. 30, 2026 in Financial Services
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EFRAG has formally asked the European Commission to postpone the mandatory review of an IFRS 17 accounting exemption. The request seeks to delay the evaluation until the International Accounting Standards Board completes its own implementation review.
Why it matters
The exemption allows insurers to avoid splitting contracts into annual cohorts, a process that requires complex and costly reporting adjustments. Postponing the review prevents companies from incurring potentially redundant costs if the standard undergoes further revisions.
The accounting exemption, introduced in 2021, is currently utilized by insurers in seven EU member states and Norway. A formal review of this regulatory relief must be completed by the European Commission by the end of 2027.
The players
EFRAG
An advisor to the European Commission that develops and provides technical advice on accounting standards for use within the European Union.
European Commission
The executive branch of the European Union responsible for drafting legislation and enforcing common market regulations.
International Accounting Standards Board (IASB)
An independent, private-sector body that develops and approves International Financial Reporting Standards used by companies globally.
The details
The IFRS 17 standard normally requires insurance contracts to be grouped into annual cohorts for financial reporting purposes, a method that can create administrative burdens. The European exemption allows insurers to report these contracts without such division, provided they meet specific criteria. EFRAG argues that any regulatory decision made before the international standard-setter concludes its review would be premature and could force unnecessary operational changes on firms.
Timeline
The exemption was introduced into European law in 2021.
EFRAG sent the request letter to the European Commission in late September 2026.
Discussions regarding the initiation of the review are scheduled to begin in Q4 2026.
The European Commission is required to finish its review by the end of 2027.
Market Landscape
The move follows established precedents where European regulators align local accounting practices with the global IFRS 17 insurance contracts standard. By requesting a delay, EFRAG seeks to prevent the regulatory drift that occurs when regional exemptions are re-evaluated ahead of global standard updates.
Insurers relying on the annual cohort exemption should monitor the Commission's response in Q4 2026 to gauge their reporting requirements for upcoming cycles. Operators should consult with their internal audit teams to assess potential impacts if the exemption is modified or allowed to expire.
The takeaway
The attempt to sync regional reviews with global standards highlights the high cost of redundant financial reporting adjustments for insurers. Operators should flag the end-of-2027 deadline for the Commission's mandatory review in their long-term regulatory compliance calendars.
Further reading
For broader trends affecting sector compliance, visit our Financial Services section.
More information
View the EFRAG letter regarding accounting exemption for detailed technical justifications.
Source note: This article includes information reported by Agence Europe.
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