International Accounting Standards Board Issues
May 17, 2007
This week, the International Accounting Standards Board (IASB) issued its long-awaited two-part Discussion Paper “Preliminary Views on Insurance Contracts” for public distribution and comment.
This Discussion Paper presents the preliminary views of the IASB on the main components of an accounting model for insurance contracts.
The preliminary phase of the IASB project resulted in IFRS 4 Insurance Contracts, an interim standard that permits a wide variety of accounting practices for insurance contracts. Many of these practices differ from those used in other sectors and therefore make it difficult to understand insurer’s financial statements.
Part One of the enclosed IASB Discussion Paper contains an Invitation to Comment and the main text of the document. Part Two contains the Appendices. Both parts are enclosed for your review. Please click on the hyperlinks in this paragraph to view the documents.
Further, the US Financial Accounting Standards Board plans to publish an Invitation to Comment containing this discussion paper, and has said that it will use the responses it receives in deciding whether to add to its agenda a joint project with the IASB to develop a comprehensive standard on accounting for insurance contract
Courtesy of Rob Esson, Senior International Advisor for the National Association of Insurance Commissioners (NAIC), attached hereto is a set of possible answers that the International Association of Insurance Supervisors (IAIS) Insurance Contracts Subcommittee will be considering to the questions posed by the IASB. The answers are mostly derived from a number of IAIS papers: the First and Second Liabilities Papers, the Cornerstones Paper, and the Structure Paper, including its Structure Elements.
On the first page of the notes, Mr. Esson has made an effort to identify the matters he believes may be the most controversial, among others.
IASB’s “Preliminary Views on Insurance Contracts” will be discussed at the NAIC’s June working group’s meeting. I n addition, at the IAIS, the Insurance Contracts Subcommittee will be meeting initially in London at the end of June to discuss the paper.
Should you have any comments or questions, please do not hesitate to contact this office.