What you need to know
• The FASB proposed a new model that would apply to all insurance contracts,
not just those issued by insurance entities. Banks that issue guarantees and
some other non-insurance entities would be affected.
• Many insurance contract liabilities would be measured based on current
assumptions of cash flows needed to fulfill the insurance obligations, adjusted
for the time value of money.
• The proposal would require the use of one measurement approach for most life
insurance contracts and another for most property and casualty-type contracts.
• Earned premiums would be presented on the statement of comprehensive
income for all contracts in the scope of the proposed standard.
• Certain changes in the discount rate used to measure insurance liabilities
would be recognized in other comprehensive income.
• Comments are due by 25 October 2013.