NEW ACCOUNTING APPROACH TO INSURANCE CONTRACTS UNDER THE REVISED PROFESSIONAL REGULATION

With the introduction of the new standard IFRS 17 – Insurance Contracts, the insurance industry has undergone signifi cant changes in the fi eld of fi nancial reporting over the past two years. This paper aims to present the new accounting approach related to insurance contracts, explaining the nature of the changes intro- duced by the new regulation, their impact on the presentation of certain items in the fi nancial statements, as well as their eff ects on the transparency, comparability and usefulness of fi nancial information that help stakeholders assess the business and risks that insurance companies are exposed to in the course of their activities. The most substantial changes occurred in the area of grouping of insurance contracts and the applicability of standard requirements to groups of contracts, recognition of income, valuation of insurance contract liabilities, presentation of current and future profi t, as well as presentation and disclosure of certain items in fi nancial statements.

Keywords: regulation, insurance company, fi nancial risk, fi nancial statements, liabilities, contractual service margin.