Four of the world’s largest insurance trade associations have provided the London-based International Accounting Standards Board (IASB) with detailed suggestions on financial statement disclosures for companies issuing insurance contracts.
The recommendations from the American Council of Life Insurers (ACLI), American Insurance Association (AIA), the Life Insurance Association of Japan (LIAJ) and the German Insurance Association (GDV) are aimed at “aiding in the development of international accounting standards for insurers,” said the announcement.
They “can be used as a starting point by the IASB as it begins its work on financial statement disclosures, which are presently unaddressed in the Draft Statement of Principles on Insurance Contracts.” The Draft which the IASB has been working on since late last year, hopes to “promote uniform international accounting standards for insurance, and includes prescribed standards related to the recognition and measurement of insurance liabilities based on a ‘fair value’ concept. ”
The bulletin listed the following items as requiring disclosures:
-Composition and valuation of contract liabilities
-Loss contingencies.
-Reinsurance risk.
-Accounts receivable associated with insurance contracts.
-Capital adequacy
The IASB is expected to review the four groups’ submission at its next meeting in London from October 23 through 25.
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