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Member, Beacon International Group, Ltd.
DES PLAINES, Ill.--Seven insurance trade associations are asking drafters of international accounting standards to revise their proposal, including changing the basis for measuring insurer assets and liabilities.
The trade groups oppose a proposal by the London-based International Accounting Standards Board to measure both insurance assets and liabilities at "fair value," which is similar to market value, according to a statement from the Des Plaines, Ill.-based National Assn. of Independent Insurers.
The IASB's proposed standards aim to increase transparency of insurers' financial reports and to improve disclosure.
However, "because of the long-term nature of many insurers' assets and liabilities and the enormous complexities involved in discounting insurance liabilities, this accounting model would mislead policyholders, potential customers, investors, regulators and others about a company's true value," said Stephen Broadie, NAII assistant vp-financial legislation and regulation.
Joining the NAII in signing a letter urging changes to the IASB proposal were: the American Council of Life Insurers, the Austrian Insurance Assn., the German Insurance Assn., the Life Insurance Assn. of Japan, the National Assn. of Mutual Insurance Cos. and the Reinsurance Assn. of America.