Insurance Company Accounting

This course looks at:

Traditional accounting GAAPs for insurers

• Overview of the life and non-life insurance business
• Insurers’ balance sheet and profit and loss
• Non life: unearned premium reserves, reserves for unexpired risks and claims reserves
• Life technical reserves, reserves for unallocated bonuses, and deferred acquisition costs
• European 1991 directive
• Problems with traditional accounting: lack of consistency and transparency

Impact of IFRS on insurance accounting

• IAS 39 & IFRS 7
• Marking to market insurance investments: ARFS and at fair value through P&L
• Accounting for derivatives and hedge accounting overview
• Discussion of insurers’ exposure to credit market squeeze
• IFRS 4 – Phase I
• Defining insurance contracts
• Shadow accounting of insurance liabilities

Future development: IFRS 4 – Phase II: insurance contracts

• Project status and review of Discussion Paper
• Measuring insurance liabilities based on (1) probability weighted expected cash flows, (2) current discount rates, (3) risk margin
• Expected industry reaction