Description: Businesses across the board have been drastically impacted by the effects of COVID-19 over the course of 2020, and insurance was not immune. Perhaps most relevant to this industry’s current capital and liquidity concern is the prevailing low interest rate environment. This has been a global trend in the last decade, and treasury rates in much of the developed world are at or near zero. Reduced investment returns limit an insurer’s ability to achieve their desired return on equity, eliminating previously profitable strategies that depended on the leverage of life and annuity balance sheets. Focus and activity have instead shifted to other methods to counteract the low interest rate markets and accompanying capital strain. Examples include increased mergers and acquisitions (M&A) activity within the insurance industry and an increasing focus by private equity firms in the insurance market for asset-intensive products, both of which reflect the goal of increasing yield rates on capital.

Description: Feature article discussing the number of challenges associated with ASU 2018-12 related to the measurement of market risk benefits.

Description: Article discusses the measurement objectives being considered by the FASB and IASB joint project to produce a new accounting standard for insurance contracts.

Description: A description and status update on all recent research reports sponsored by the Financial Reporting Section.

Description: This article provides an EV overview, current industry usage, key considerations illustrated by MetLife’s strategic spin-off of Brighthouse Financial, as well as implementation notes.

Description: This article focuses on the market risk benefit (MRB) measurement model and will examine a generic guaranteed minimum death benefit (GMDB) in the context of LDTI and its impact from both the ceding entity and the reinsurer standpoints.

Description: Feature article discussing the use of fair value or market consistent measurement for the valuation of insurance liabilities.

Description: Feature article discussing the IASB’s and FASB’s introduction of the use of other comprehensive income (OCI) to report certain changes in the value of insurance contracts.

Description: This article helps companies better understand the currently proposed upcoming VM-22 regulation by comparing the VM-22 measurement model to LDTI MRBs. The article highlights key considerations as companies plan for adoption of these two measurement models. These considerations should help inform a company’s strategy related to the business impacted by these standards.

Description: This article discusses the Own Risk and Solvency Assessment ORSA Guideline that is being developed by the NAIC Group Solvency Issues working group as part of the Solvency Modernization Initatitve SMI. It looks at the purpose of the ORSA, the three sections of the NAIC ORSA and issues with current U.S. ORSA draft.