Deloitte has disclosed that the implementation of International Financial Reporting Standards (IFRS) 17 will augment and accelerate the National Insurance Commission’s (NIC) efforts to institute a risk-based capital (RBC) regime in Ghana.

While IFRS 17 is a global financial reporting standard, the professional services firm believes it will still form a key component of the measurement model of local Risk-Based Capital (RBC) frameworks that are under development.

“Ghana’s planned RBC regime shares many common traits with similar regimes such as Solvency II in the European Union (EU) and the Solvency Assessment and Measurement (SAM) framework in South Africa”, it revealed in its 2024 Africa Insurance Outlook.

As such, Deloitte said regulators implementing RBC frameworks will look to insurers leveraging the capabilities they have built for financial reporting.

This compatibility, it added, supports the development of robust capital adequacy models, enhances regulatory oversight, and ensures that insurers maintain sufficient capital to cover their risks. In turn, this contributes to the overall stability and resilience of the insurance sector.

The regulatory response to IFRS 17 in Ghana, Deloitte stated, is indicative of the sensitive and delicate balancing act regulators must perform between advancing financial stability, improving transparency, and aiding insurers in their implementation efforts without undue cost.

Even though there are still obstacles to overcome, proactive involvement and cooperative efforts from the regulator, insurers, and other stakeholders, it mentioned, are crucial to navigating this new standard and the ever-evolving insurance reporting landscape.