IVASS publishes Provisions no. 108/2021 and 109/2021, which envisage the extension of the deadlines for the temporary suspension of unrealized losses in short term financial assets and the deadlines for the application of the EU International Financial Reporting Standard

With Provision No. 108/2021 of 27 January 2021, IVASS amended Regulation No. 43/2019 by aligning the insurance regulatory framework with the new provisions laid down in the Decree of the Ministry of Economy and Finance of 17 July 2020, providing for the extension of the temporary suspension of unrealized losses in short term financial assets in local GAAP financial statements.

In consideration of the unusual circumstances that the financial markets are experiencing at this time, insurance companies may exercise the option, also in relation to the closing of the financial year as at 31 December 2020, to evaluate short-term assets of the portfolio at booked value of the last approved financial statements or, for assets not present at that date, to value them at acquisition cost. It should be noted that this option is not extended to long-term unrealized losses.

It should be noted that this amendment to Regulation No. 43/2019 does not constitute any alteration in relation to the provision: (i) of the additional information to be provided to IVASS; (ii) of the provision of the profits arising from the exercise of the option to an unavailable reserve; (iii) of the public disclosure requirements. Furthermore, in order for the company to exercise the option provided for in this Provision for the financial year 2020, it is required, as for the previous financial year 2019, that this decision be adopted by resolution of the administrative body, in consideration of a specific report signed by the heads of the risk management and actuarial functions.

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Again with regard to the accounting standards and financial statements of companies that carry out insurance and reinsurance activities, on 27 January 2021, IVASS, with Provision No. 109/2021, implemented in the Italian secondary legislation the amendments introduced by EU Regulation 2020/2097 to the European discipline on the accounting standards to be adopted for the purposes of preparing the consolidated financial statements, in particular with regard to International Financial Reporting Standard 9 (IFRS 9 Financial Instruments).

In accordance with the new EU rules, this Provision extends the deadline for the application of IFRS 9, previously set for 1 January 2021, to 1 January 2023.

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For further information please contact Antonia Di Bella, Michele Zucca, Anthony Perotto and Guido Foglia.