Description: The article summarizes implications of rising interest rates on U.S. GAAP and statutory financial reporting for life insurers, highlighting potential tailwinds from steady increases and headwinds from sharp increases. We further provide insights into how insurers can leverage ALM programs and interest rate risk hedging practices to favorably position themselves in a rising rate environment

Description: This dialogue discusses the history and purpose of section 811(a) and its historic role in the computation of life insurance company taxable income and, in particular, reserves.

Description: This article discusses the impact on the financial statements of changing from Statutory Accounting to GAAP Accounting and the under-reporting of long-term earning power by insurance companies because of the AICPA technique of handling the transition.

Description: Embedded Risk in Settlement Options on Older Life and Annuity Contracts

Description: Performance measurement is not the primary purpose of either GAAP or statutory accounting. This article discusses alternative methods of reporting used by life insurance companies to better measure financial performance.

Description: The latest draft ORSA Guidance Manual was released on Oct. 14, 2011. An overview of the requirements from a qualitative, quantitative and governance perspective was provided in the December edition of the Financial Reporter. Several trade associations and com- panies commented on the draft.

Description: This article gives the highlights of the 88-page report including detailed assumptions for products including universal life with secondary guarantees (ULSG), cash accumulation universal life (CashAccum), current assumption universal life (CAUL), indexed universal life (IUL) and variable universal life (VUL). The 29 companies and 83 products represented in the report allow for an interesting perspective on premium persistency assumptions used in pricing, cash flow testing (CFT) and generally accepted accounting principles (GAAP)/international financial reporting standard (IFRS) functions. This article covers some general results and ULSG-specific results.

Description: One major feature of the OECD's two-pillar regime is that MNEs would base the calculation of taxes due on book-based financial statements. The article provides a summary of how these rules operate along with suggested actions insurers can take today to prepare for timely compliance.

Description: Update on accounting and capital/RBC issues subsequent to tax reform.