We want to inform you about a change to accounting standards that affect all workers' compensation boards across Canada. As of January 1, 2023, all insurance companies and workers' compensation boards have transitioned to the new International Financial Reporting Standards for Insurance Contracts (IFRS 17).
This new accounting standard requires changes to how our financial statements are prepared and reported. It introduces a standardized approach to valuing claim liabilities and adjusts how revenue and liabilities are recognized. While this does not change the fundamental economics of workers' compensation boards, adopting IFRS 17 may result in increased year-over-year volatility in financial statements because of how the discount rate is determined . The discount rate is key to measuring WorkSafeNB’s claim liabilities.
Even though short-term perspectives are reflected in the new financial reporting standards, WorkSafeNB is committed to keeping a long-term outlook when setting assessment rates and measuring funding levels. This commitment ensures stability for employers, helping to mitigate any short-term fluctuations in assessment rates.
Like all other workers’ compensation boards across Canada, WorkSafeNB will produce two distinct financial valuations beginning December 31, 2023:
Frequently asked questions are listed below to provide further detail on this transition.
At WorkSafeNB, we prioritize transparency and actively seek your engagement. As we adjust to the changes introduced by IFRS 17, we encourage your questions and feedback. Your insights are valuable, and we're committed to providing clear and prompt responses.
If you would like more information, contact us at 1 800-999-9775.
The International Accounting Standards Board (IASB) requires the adoption of IFRS 17 – a global standard for reporting financial statements – by any organization that issues insurance contracts. This applies to organizations ranging from private insurance companies to Canadian workers’ compensation boards.
The changes primarily affect how financial information is presented in our statements, not the underlying principles guiding the system’s long-term sustainability, such as determining funding requirements, rate setting and investment decisions.
Changes in our financial statements are a result of adjustments to the discount rate used to calculate claim benefit liabilities. The new standard bases discount rates on prevailing market interest rates at the time of reporting (short-term view) and are unrelated to the investments in the Accident Fund. Since market interest rates change often, this will cause increased volatility in the reported financial results. This is a notable change from the previous approach, where discount rates reflect the Accident Fund’s expected long-term investment return.
We’ll release the first statements reported under IFRS 17 in summer 2024. These will detail the financial results of 2023.
No. These changes do not alter the core economic fundamentals of the workers' compensation system. WorkSafeNB’s board of directors is committed to maintaining a long-term perspective when measuring funding levels to ensure the system stays healthy over the long-term.
No. WorkSafeNB’s board of directors will continue adhering to a long-term perspective when setting assessment rates ensuring stability and fairness in funding the workers’ compensation system.
No. WorkSafeNB’s board of directors will maintain a long-term discipline for investments to ensure the sustainability of the workers’ compensation system now and into the future.
