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South Korea’s finance regulator may adopt a softer approach to the implementation of two major financial standards – International Financial Reporting Standards (IFRS 17) and the Korean Insurance Capital Standard (K-ICS).
Earlier this month, Korea’s insurance industry requested the Financial Services Commission (FSC) to flexibly adopt IFRS 17 and K-ICS, reports Business Korea. The industry has continuously requested the FSC delay enforcing the standards, keeping in mind the preparedness of the market’s insurers. The regulator initially denied the insurance industry’s request and said that it would implement both immediately and simultaneously.
However, some hope remains after FSC chairman Choi Jong-ku recently said at a seminar: “We will introduce the two systems without imposing a big burden on insurance companies.”
According to the insurance industry, the FSC should postpone the implementation of K-ICS or phase it in gradually. Insurers argue that simultaneously adopting it with IFRS 17 would place great strain on the insurance sector, impacting not just profitability but even their survival.
“I heard that Europe also discusses ways to delay the introduction of the IFRS 17,” an insurance official told Business Korea. “The South Korean government should reconsider the simultaneous adoption of the IFRS 17 and the K-ICS systems as well.”
