GNAIE Welcomes FASB Insurance Contracts Discussion Paper

NEW YORK, Sept. 17 /PRNewswire-USNewswire/ -- Group of North American Insurance Enterprises (GNAIE) Executive Chair Jerry de St. Paer today welcomed the issuance by the US Financial Accounting Standards of a Discussion Paper on accounting for insurance contracts.

"Using a Discussion Paper approach is the best way to resolve the issues that divide accounting standard setters around the world on insurance contracts accounting," said de St. Paer.

The FASB approach is different from that of the International Accounting Standards Board (IASB) who issued an Exposure Draft, usually required to be a near final standard.

"The IASB Exposure Draft should have also been a discussion paper since most of the major threshold issues, like Contract Fulfillment Approach vs. Exit Value as a Measurement Basis, Composite or Multiple margins, Discounting Issues, were all subjects that either divided the Board or had not received sufficient discussion," according to de St. Paer.

De St. Paer noted the two Boards have been working on these and other insurance related issues, like Revenue Recognition, Financial Instruments, and Financial Statement Presentation, for many years.

"We think the comments that will be made by users, preparers, accounting firms and others and the December Roundtables will show the two Boards that they are very close to a high quality set of standards for life insurance and property/casualty accounting. The key question asked by the FASB is whether or not this will result in improved standards for US filers compared to the current U.S. GAAP," said de St. Paer.

"The biggest mistake would be to rush this deliberative process to a hasty conclusion.  We support the plan of the Joint Boards plan to begin redeliberation in January 2011. And we would expect the project to be completed expeditiously when the issues have been resolved, not according to any artificial timetable." added de St. Paer.

The IASB and FASB recently extended their June 30, 2011 deadline to December 31, 2011 for many projected standards they agreed to adopt as part of a Memorandum of Understanding and in line with recommendations from the Financial Stability Board and the G20 Finance Ministers and Heads of State.

GNAIE is an association of North American with the goal of ensuring high quality international accounting and solvency standards for insurance companies and, to that end, to increase communications between North American based insurers and international regulators and standard setters. GNAIE works to meet its goals through modeling of proposed accounting standards, analysis, comment and coordination with various end users of financial reports.

To influence the development of international accounting and solvency standards to ensure that they result in robust, high quality standards for insurance enterprises.

SOURCE Group of North American Insurance Enterprises

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