ICAEW.com works better with JavaScript enabled.

FRS 103 Insurance Contracts

FRS 103 Insurance Contracts consolidates the financial reporting requirements and guidance for insurance contracts.

Access the standard

All editions of FRS 103 can be found on the FRC’s website. Note the September 2024 edition of FRS 103 includes some amendments with a mandatory effective date that is later than 1 January 2024. Find details of the effective dates of amendments in the Recent amendments section below.

Summary

FRS 102 provides the definition of an insurance contract, however it does not set out the accounting required for such a contract; FRS 103 has been issued to provide the specific accounting requirements for such contracts.

FRS 103 combines existing guidance on insurance contracts found elsewhere and broadly allows entities to continue with their current practices (subject to certain additional considerations). In addition, it allows them to take advantage of ‘improvement options’ similar to those available to entities that apply IFRS 4 Insurance Contracts, provided that such options continue to comply with existing legal and regulatory requirements and are either more relevant to the users’ economic decision making and no less reliable or more reliable and no less relevant. Improvements that are permitted (but not required) include:

  • Allowing remeasurement of designated insurance liabilities to reflect current market interest rates through profit or loss.
  • Allowing remeasurement of liabilities for recognised but unrealised gains and losses where realised gains and losses on assets affect the valuation of insurance liabilities. The related adjustment to the liability is recognised through Other Comprehensive Income (OCI) if and only if the unrealised gains or losses are recognised through OCI.

New entrants to the insurance market which have no existing policies are advised to start with FRS 103 guidance based on FRS 27 Life Assurance/ the Association of British Insurers’ SORP before deciding whether to implement the improvements.

The standard contains disclosure requirements that:

  • identify and explain amounts arising from insurance contracts issued by an entity and reinsurance contracts held by an entity;
  • relate to the financial strength of entities with a long-term insurance business;
  • help users understand cash flows associated with those insurance contracts.

Who should apply the standard?

FRS 103 is applied by companies that apply FRS 102 and:

  • issue insurance (and reinsurance) contracts;
  • hold reinsurance contracts;
  • issue financial instruments with a discretionary participation feature.

Which version of the standard?

Annual period Relevant edition of the standard Notes on amendments and early adoption
Starts on or after 1 January 2026 FRS 103 Insurance Contracts (September 2024) This edition of FRS 103 incorporates all amendments issued up to September 2024 including the Periodic Review 2024 amendments, which are mostly effective from 1 January 2026.
Starts on or after 1 January 2024 FRS 103 Insurance Contracts (January 2022)

An entity will apply the January 2022 edition of FRS 103, plus:

  • a new requirement in Section 6 Transition to this FRS (part of the Periodic Review 2024 amendments), with this requirement only being effective from 1 January 2024.
Starts on or after 1 January 2022 FRS 103 Insurance Contracts (January 2022) This edition of FRS 103 incorporates all amendments issued up to January 2022.

Recent amendments

Log in to read more

These resources are available exclusively to Corporate Reporting Faculty subscribers, ICAEW members and students.

ICAEW resources

Featured factsheet

‘The UK Financial Reporting Regime’ factsheet provides an overview of the UK accounting framework, which accounting standards are applicable, and the options that are available to different types of entity.

View the factsheet
Compass
  • UK GAAP annual factsheets
    In depth analysis of new and modified UK GAAP requirements that are mandatory for a specific accounting period.
  • UK regulation factsheets
    In depth analysis of legal and regulatory requirements affecting UK company accounts.
  • UK GAAP webinars
    Live webinars and events covering the latest UK GAAP developments, including on-demand recordings.
  • By All Accounts
    Exploring corporate reporting trends to help you navigate our changing profession.

eBooks

The ICAEW Library & Information Service provides full text access to a selection of key business and reference eBooks from leading publishers. Explore the collection by A–Z of title or browse by subject, including IFRS, UK GAAP and US GAAP.

Bloomsbury Accounting and Tax Service

Eligible firms have free access to Bloomsbury Professional's comprehensive online library, comprising around 80 titles from some of the country's leading tax and accounting subject matter experts. Find out who is eligible and how you can access the Bloomsbury Accounting and Tax Service.

Other resources

Further support

Financial reporting helpsheets
Corporate reporting resources

Practical resources including factsheets, online guides and webinars on financial and non-financial reporting.

Browse the collections
Black woman working at computer
Technical Advisory Services

Our experienced advisors can help you with technical questions.

Get in touch
Young man reading in a library
Library and Information Service

Expert help with research and access to trustworthy, professional sources.