ASB to probe insurance industry accounting
The Accounting Standards Board has been asked probe the role of accounting standards in the insurance industry following the release of the Penrose report into the near-collapse of Equitable Life.
Link: Penrose offers little hope for policyholders
Financial secretary Ruth Kelly told MPs that she had asked the standard-setter ‘to initiate a study into the accounting for with-profits business by life insurers’.
Delivering her statement on Penrose, she said: ‘The study will have particular emphasis on identifying ways of improving the transparency of reporting.’
Kelly also announced that Paul Myners will lead a review into the corporate governance arrangements applicable to mutual life offices in comparison with that for companies and review the level of regulation of mutuals by the FSA.
She said: ‘The government sees no reason in principle why boards of mutual life offices should not be as accountable to their members as those of comparable companies are to their shareholders.’
A third ‘wide ranging review’ will be carried out into the actuarial profession – whose lack of professional standards came in for savage criticism from Penrose.