The Financial Accounting Standards Board (FASB) has approved the issuance of a final Accounting Standards Update (ASU) of targeted changes to the accounting for long duration insurance contracts. The targeted improvements will be effective in 2021 with early adoption permitted. This paper by Milliman consultant William Hines outlines the decisions and discussions at the June 6, 2018, FASB meeting.
The Financial Accounting Standards Board (FASB) has proposed changes to the accounting for long-duration insurance contracts in four major areas. In this paper, Milliman consultants William Hines and Karthik Yadatore summarize the FASB’s original proposal and outline the key changes made during the re-deliberations.
The Financial Accounting Standards Board (FASB) has proposed significant changes to accounting standards for long duration insurance contracts to address several stakeholder concerns. In this report, Milliman consultants discuss the impact of the FASB’s proposed changes on earnings and equity for several illustrative product types. They also examine the industry’s preparedness to adopt the new guidance.
Progress continues to be made by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) toward the next exposure draft of an accounting standard for insurance contracts. In addition, the boards are moving closer to further changes to the accounting for the assets backing insurance contracts. However, convergence between the FASB and IASB appears to be limited, both for the insurance contract project and more generally.
This white paper provides an update on recent activity on these topics.