IAS and Financial Accounts of Insurance Corporations and Pension Funds ICPF

1
(No Transcript)
2
IAS and Financial Accounts of Insurance
Corporations and Pension Funds (ICPF)

• 1. Overview
• 2.1 IAS and Financial Accounts
• 2.2 Current compilation practice
• 2.3 Previous harmonisation InsAD 1991
• 2.4 Changes in data availability due to IAS
• 2.5 National implementation of IAS
• 3. ICPF specific possible amendments to IAS

3
2.1 IAS and Financial Accounts

• Main concerns
• Valuation of stocks by instrument
• irrespective whether asset or liability and
• of purpose or time frame
• Proper transactions
• valued at time of transactions

4
2.1 IAS and Financial Accounts

• National GAAP
• Valuation differs between countries
• (Market values not generally available)
• IAS offers
• Fair value concept (FVC) close to ESA95
• On balance sheet recording of derivatives

5
2.2 Compilation of FA for ICPF

• Legal powers to collect statistics are limited
• Main data sources (by countries)
• - mostly business accounting data (11)
• (typically collected by supervisory
  authorities)
• - additional surveys in some countries (2)
• - some countries rely on surveys (4)
• Valuation of assets Fair values (12) ? 2.3

6
2.3 Previous harmonisation effort InsAD 1991

• Insurance accounting directive of Dec. 1991
• applies to all insurance undertakings
• Implementation by member states for
• - Insurance Corporations (14 or 15)
• - Pension funds (7)
• Requires disclosure of current values in the
  accounts, or notes to the accounts

7
2.3 Previous harmonisation effort InsAD 1991

• Requires disclosure of main liability items (ITR)
  in accordance with ESA95 (AF.6)
• ?Business accounting data already relatively
  well harmonised for IC (lesser extent PF)
• ?Business accounting data suits rather well the
  needs of Financial Accounts for annual stocks
  (lesser extent for transactions)

8
2.4 Changes in data availability due to the IAS
regulation

• No drastic changes compared with InsAD
• - fair values already available (see Annex 1)
• - derivation of transactions remains difficult
• Most important improvements
• - recognition and fair valuation of
  derivatives
• - detailed provisions for the calculation of
  liabilities of (autonomous) pension funds

9
2.5 Expected national application of IAS
10
3. ICPF specific possible amendments to IAS

• IASBs Steering Committee on Insurance
• Treatment of (some) insurance contracts as
  financial instruments ? Fair Value Concept
• Ban on equalisation and catastrophe provisions
  (to be replaced by a special reserve financed by
  profit rather than being accounted as liability)
  
• Opposition from American and European trade
  associations ? Implementation uncertain

11
Annex 1 Valuation requirements of ESA95, the
InsAD and IAS