The UK Financial Reporting Council (FRC) has issued an update of the UK accounting standard for insurance contracts, FRS 103, which differs from the current proposals of the International Accounting Standards Board (IASB).

Draft FRS 103 is based both on the current IFRS 4 and other UK provisions, which allows UK entities that do not apply IFRS to continue with their existing accounting policies in the interim, FRC told The Accountant.

Draft FRS 103 applies to life and general insurers and to unlisted entities that have insurance contracts. Some aspects of Draft FRS 103 would also apply to other entities that are not regulated insurance businesses in so far as they have insurance contracts in place.

In light of the forthcoming several regulatory developments in the insurance industry, the FRC aims at minimising the impact of accounting changes "in quick succession" for UK insurers, the regulator said.

Once the IASB has finalised its current proposals, FRC will consider whether to update UK GAAP further so that IASB proposals can be adopted in UK GAAP, the regulator said. FRC added that any proposed change as a result will be subject to consultation.

In the meantime FRC said it will be contributing to the IASB consultation on the subject and holding an outreach event on 2 October.

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UK Financial Reporting Council