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Insurance Contracts

IASB Meeting Summaries and Observer Notes

 IASB / FASB meeting January 2011



Insurance contracts - comment letter summary

The IASB and FASB discussed the feedback received in the comment letters on the IASB's exposure draft Insurance Contracts and the FASB's discussion paper Preliminary Views on Insurance Contracts. No decisions were made.

Insurance contracts - education session

The boards had invited guest speakers to an education session on potential discount rates for non-participating insurance contracts. The IASB's exposure draft Insurance contracts and the FASB's discussion paper Preliminary Views on Insurance Contracts had both proposed a bottom-up determination of the discount rate that starts with a risk-free interest rate and adds an adjustment for illiquidity. The guest speakers provided presentations on, as an alternative, various top-down approaches that start with the return on a specified portfolio of assets and then deduct components that do not reflect the characteristics of the insurance liability being measured. The approaches discussed were:

  • economic default adjusted discount rate (EDAR); speaker: Rob Esson, National Association of Insurance Commissioners (NAIC) and the International Association of Insurance Supervisors (IAIS);
  • reference asset portfolio-based discount rate; speakers: Francesco Nagari and Andrew Smith, Deloitte LLP;
  • asset-linked discount rate; speaker Nick Bauer, Eckler Ltd.

No decisions were made.

Next steps

The boards will continue their discussions on this project at an additional meeting on 2 February 2011.

Date: 1/18/2011