BC2 The Board decided to develop an International Financial Reporting Standard (IFRS) on insurance contracts because:

(a) there was no IFRS on insurance contracts, and insurance contracts were excluded from the scope of existing IFRSs that would otherwise have been relevant (eg IFRSs on provisions, financial instruments and intangible assets).

(b) accounting practices for insurance contracts were diverse, and also often differed from practices in other sectors.

BC3 The Board’s predecessor organisation, the International Accounting Standards Committee (IASC), set up a Steering Committee in 1997 to carry out the initial work on this project. In December 1999, the Steering Committee published an Issues Paper, which attracted 138 comment letters. The Steering Committee reviewed the comment letters and concluded its work by developing a report to the Board in the form of a Draft Statement of Principles (DSOP). The Board started discussing the DSOP in November 2001. The Board did not approve the DSOP or invite formal comments on it, but made it available to the public on the IASB’s Website.