Page 30 - Annual Report 2021 EN

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Risk Assessment Visits (RAVs) Thematic reviews Phase 1: Phase 4:

Gap Analysis and Project Plan Testing and Parallel Runs
Arising from risk assessment activities, the BIS BIS conducted two thematic reviews: the corporate

supervisory programme focussed on the following governance arrangements at QFC firms in alignment To identify and understand the gaps relating to finance, Firms must perform a parallel run of the IFRS

priority areas based on the risk assessment: with the revised Governance and Controls Rules data, actuarial, IT systems, policies, procedures, and 17-compliant systems in conjunction with the current
2020 (“CTRL”) and IFRS 17 preparation and financial controls, with gaps clearly documented with supporting system. This would involve user acceptance testing on
• credit and market risk
impact assessment for insurers operating in the QFC. technical documentation. the runs, output, and processes using a programme
• operational resilience and business continuity
independent of the insurer’s internal programmes.
• governance arrangements and compliance
a. Corporate Governance – Thematic Firms would then be required to perform user training
with the revised Governance and Controlled
— Phase 2: and review parallel testing results under IFRS 4 and
Functions Rules 2020 (“CTRL”)
With the rollout of the revised CTRL Rules, the Financial Impact Assessment IFRS 17 of their financial statements. Subsequently,
• capital planning (ICAAP/ORSA)
supervision team conducted a gap analysis of all firms will be required to submit prudential returns to

BIS conducted seven RAVs at banks and insurers during QFC firms’ compliance with the new requirements. To assess the impact of IFRS 9/17 on their financial QFCRA under both IFRS 4 and IFRS 17 quarterly.

the year. Overall, the results of the RAVs conducted The review identified that most QFC institutions face statements, including the Income Statement and the
were satisfactory and in line with previous years. challenges in complying with the independent board Balance Sheet, considering different sensitivities on the QFCRA is on track with the IFRS 17 Implementation

member requirements and the need to ensure that board assumptions (e.g., discount rate, risk adjustment, etc.) roadmap by the due date of 1 January 2023.

members are sufficiently rotated after every nine years.
Action plans were put in place to address identified
Phase 3:
gaps, and the supervision team is actively monitoring

the implementation of the risk mitigation plans. Implementation of the Project Plan

Insurers must ensure that they have the necessary
b. IFRS 17 Implementation – Thematic
infrastructure and processes to implement IFRS 9/17,
—
including developing and designing new processes
In September 2019, the QFCRA conducted a survey
and procedures for the business and any system
to assess the preparedness of QFC insurers for IFRS
developments required under the standard.
17 implementation. The survey questionnaire was

sent to 8 QFC authorised insurance firms (two LLCs
This would also require implementing new processes
and six branches). The questionnaire covered the
and procedures, amendment of IT, finance, and
general status of preparedness, implementation
actuarial systems, and developing of actuarial models.
planning, IT infrastructure, methodology,

asset valuation choices, and transition.

Arising from the review, QFCRA rolled out its
IFRS 17 implementation roadmap comprised of

four distinct phases.