Issues and Problems of Financial Reporting in the Insurance Industry in Iran

Due to the nature and importance of the insurance industry, optimal financial information and reporting ‎is very important in this industry. Nevertheless, the investors of insurance companies, the stock exchange ‎organization, central insurance and even the policyholders as the main beneficiaries of insurance companies expect ‎significant improvements in the financial reporting of insurance companies. The clauses of the auditor's report on ‎reserves and non-compliance with Iran's Accounting Standard No. 28 and the Central Insurance Regulations are ‎other noteworthy issues. The International Financial Reporting Standard 4, which will be replaced by IFRS 17 in ‎‎2023, is another important issue that Iran's insurance industry must be able to prepare to accept. Therefore, in the ‎current research, the issues and problems of financial reporting in the insurance industry have been identified from ‎the dimensions of recognition and measurement, reporting and disclosure, and finally systems and processes, which ‎are the three main components in the framework of financial reporting.‎

The method used in the research is a survey and the data collection was done through a questionnaire. ‎Finally, 50 questionnaires from 16 insurance companies were received and analyzed.‎

The research results show that the insurance industry is facing challenges in financial ‎reporting. The identified challenges in the field of recognition and measurement include the lack of accounting ‎standards in the field of life insurance, lack of application of common measurement methods at the international ‎level, lack of insurance measurements at the group level, Contracts and recognition of insurance premium income ‎are based only on historical information and ignoring adjustments including risk adjustment. In the field of ‎reporting and disclosure, there are challenges such as the inability to distinguish between insurance operations and ‎investment operations, the problem of distinguishing whether a group of contracts is profitable or unprofitable, and ‎the nature and amount of risks arising from insurance contracts are not disclosed. . Finally, the lack of sufficient ‎training of employees and the lack of integration of the information technology system and the software used are ‎challenges in the field of systems and processes‎.