Description: Discusses the top concerns of U.S. insurers regarding the recent IASB Exposure Draft entitled Insurance Contracts and the FASB Exposure Draft entitled Preliminary Views on Insurance Contracts.

Description: The implementation of the IFRS 17 insurance accounting standard has brought significant changes to the financial reporting landscape of insurance companies. With new disclosure requirements and altered profit analysis, understanding and interpreting future profitability have become a topic of concern for the industry. While stability remains a key objective for insurance companies, the earning patterns might become more volatile especially when the contractual service margin (CSM) is exhausted, and a loss component (LC) needs to be established. Reinsurance, a common risk mitigation tool, can play a pivotal role in managing earnings volatility and minimizing losses for onerous measurement units. In this article, we propose a new key performance indicator (KPI) called “loss recoverability” to assess the performance of reinsurance treaties in achieving these objectives. We explain how this KPI can be utilized in multiple scenarios to evaluate the effectiveness of reinsurance strategies and pursue stability in earning patterns.

Description: Research is a primary mission of the Financial Reporting Section and a significant use of our section dues revenue. Here is an update, as of September 2017, on projects in process and those recently completed.

Description: Discussion of what is included within the scope of Enterprise Risk Management and why it is of significance to the jobs of financial reporting actuaries

Description: Article discussing an alternative method to calculate the PBA deterministic reserve called the “Direct Iteration” method.

Description: Research is a primary mission of the Financial Reporting Section and is the largest use of section dues. This scorecard will keep section members informed about research projects sponsored or co-sponsored by the section.

Description: This is the first in a series of articles about accounting for reinsurance under GAAP Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). It provides an introduction to the topic, giving an overview of what has and hasn't changed. Changes include a few that directly address reinsurance and others that indirectly result from changes to direct accounting and the existing ties between reinsurance and direct accounting.

Description: Research is a primary mission of the Financial Reporting Section and is the largest use of section dues. This scorecard will keep section members informed about research projects sponsored or co-sponsored by the section.

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 introduction and effective application of US GAAP LDTI have increased the scrutiny of those reviewing the updated financial results. That is because LDTI has resulted in significant changes in actuarial reserving and deferred acquisition cost (DAC) models for long-duration contracts, including significant changes to data, assumptions and required disclosures. In light of the changes, greater reliance has been put on companies’ model risk management (MRM) teams and model validations to assess the conceptual soundness and accuracy of their companies’ actuarial models and to assess that the underlying data and process utilized are suitable and appropriate. This article covers a brief background on model validation, walk through a sample LDTI-focused model validation framework/test plan, then provide insights on common LDTI-related validation observations based on the authors' prior validation experience.