Insurers Concerned That Upcoming IASB/FASB Discussions on Insurance Contracts Will Not Address Key Issues

NEW YORK, Feb. 1, 2011 /PRNewswire/ -- The following is being issued by the Group of North American Insurance Associations, the American Council of Life Insurers, the National Association of Mutual Insurance Companies, and the Property Casualty Insurance Association of America:

A group of insurance trade associations expressed serious concerns that upcoming discussions of the insurance contracts project by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) will not address certain critical, yet controversial issues.

The industry said that a staff proposal prepared for the February 2 Joint IASB/FASB effectively prohibits significant discussions of issues raised in the comment letter process as well as the IASB and FASB Roundtables and called for the withdrawal of the paper.

The staff paper sets forth axioms and assumptions that the staff proposes will underlie the development of papers brought to the Boards to finalize proposals in the IASB's Exposure Draft (ED) and the FASB's Discussion Paper (DP).

"We were extremely surprised by both the timing and content of the staff paper given the widespread criticism the Boards received on the IASB proposal from investors, analysts, preparers and a variety of other stakeholders," according to a January 31 letter to the chairs of the two Boards.

The Trade Associations said they believed, and the Boards had previously suggested, that a more complete discussion of issues would take place in mid-February and the more controversial elements of the proposals would be re-deliberated.

However, the letter said, "The staff paper recommends that, despite strong opposition to the Board's proposals, certain critical elements of the proposals would be resolved without further discussion and not re-deliberated."

The insurance industry said that adopting the staff paper would represent "a significant departure from the 'due process' that has been committed to and is appropriate to the deliberations on the ED."

As a result, "We recommend … that the staff withdraw this paper and allow the previously planned re-deliberation process to evolve and address all of the significant issues identified by key constituents in both the comment letters and the public roundtables."

The industry said "robust accounting and reporting standards emerge from a process where critical issues are carefully evaluated and comprehensively re-deliberated before a final standard is issued.  Any decision that would diminish the evaluation or re-deliberation of critical issues identified in the comment letter or public roundtable processes should be reconsidered."

SOURCE Group of North American Insurance Enterprises

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