Description: There is often a disconnect between the way products are priced IRR and embedded value methods and the way business performance is measured once it is already on the books GAAP and GAAP ROE. This article discusses the theoretical reasons for this disconnect and how an accounting system could be developed to eliminate the disconnect and thereby align investor and management expectations with the financial reporting system.

Description: Review of modeling of impact of proposed GAAP changes and commentary on preparedness based on company survey.

Description: Actuaries are accustomed to considering how much conservatism is appropriate in their estimates, whether made for pricing or for mea- surement of liabilities. In the proposals for a new standard on accounting for insurance contracts, this conservatism is referred to by the International Accounting Standards Board IASB and the Financial Accounting Standard Board FASB of the United States as the risk adjustment.

Description: Understanding the Deferred Acquisition Cost (DAC) asset balance movements from one reporting period to the next can be a challenge when reportinged under FAS 97. The mechanics of FAS 97 call for an amortization ratio (i.e., k factor) that forces the amortization of the DAC asset to be matched to the earnings received over the life of the product. However, the fact that the k factor is dynamically set results in “unlocking” components of the DAC rollforward. This article shows how the basic equation for the amortization ratio can be used to derive equations that provide insights into what the DAC balance represents. Furthermore, partial derivatives of these equations are used to show how unexpected changes in the Estimated Gross Profit (EGP) stream impact the amortization and unlocking components of the DAC rollforward.

Description: Discussion of some of the implications of FAS 133 Implementation Issue B36 for the Financial Reporting of Reinsurance

Description: Practical Considerations for Implementing the New Statement of Position for Long Duration Contracts and Separate Accounts .

Description: Practical Considerations for Implementing the New Statement of Position for Long Duration Contracts and for Separate Accounts –

Description: Considerations when developing internal models for use in Solvency II.

Description: Overview of activities of the Financial Reporting Section.

Description: This article describes changes to financial reporting for variable annuities under US GAAP, IFRS and Statutory regulations, and implications for hedging.