Description: Discussion rebutting the Dec. 2004 issue of The Financial Reporter article titled, “On the Fair Value of Insurance Liabilities,” authored by Don Solow. That article expressed disagreement with the position of the International Accounting Standards Board and the Financial Accounting Standards Board to reflect the value of “own credit risk” in the fair valuation of insurance liabilities.

Description: This is a continuation of a discussion about the the theoretically correct treatment of the credit put the policyholder writes when purchasing an insurance contract.

Description: Discussion of progress made at the NAIC Fall National Meeting on amendments to the Standard Valuation Law, the Valuation Manual - particularly with regard to principles-based reserves, and The Academy of Actuaries work on Risk Based Capital re C-e Phase III.

Description: “It’s interesting to note that, given the past year’s reversal of fortunes in the stock markets, all the media rap about heated inquiries around back-dating options has stopped.”

Description: Discusses new thinking in regards to risk margins, in the context of fair value and principle-based reporting.

Description: Since the adoption of FAS 157, there has been much concern about the use of a company's own credit risk in the valuation of liabilities. To fully assess the implications of this requirement, the author argues that more research will be required.

Description: Update on research projects sponsored by the Financial Reporting Section.

Description: Since solvency assessment depends on a financial reporting framework, one needs risk metrics for use in financial reporting. The essay argues that conceptually, the cost of capital is the appropriate metric for reserves, while a probability level is the appropriate metric for capital. Then the essay advocates stress testing on specific scenarios as a better practical approach to ORSA.

Description: Summarizes the major provisions of the International Accounting Standards Board’s recent exposure draft entitled Insurance Contracts, regarding a full accounting standard for insurance.

Description: The following Executive Summary is an excerpt from a report by Chris O’Brien entitled, “Market-Consistent Valuations of Life Insurance Business: The U.K. Experience.” The purpose of this article is to explain the new valuation approach, set out the issues with implementation and explain how insurers have addressed these issues.