PracticeAuditInsurers to get fair value treatment

Insurers to get fair value treatment

The first of a two-part draft accounting standard for insurers will be released by the IASB tomorrow and is likely to spark protests from insurance companies across the globe.

Link: Insurance companies take on IASB

The European Commission is asking for talks between the board and insurers to be held urgently, in order to relay concerns that the new rules will cause volatility in financial reports. Fair value is once again at the centre of the issue, with insurance companies required to record liabilities at market value.

Also included in the proposals are the wiping out of tax-sheltered catastrophe provision, which have been used to smooth fluctuations in profits, and the banning of offsetting insurance liabilities against related reinsurance assets.

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