Proposed Rules For Insurance Company Accounting Are Tougher

The Financial Accounting Standard Board will propose new rules for insurance accounting on Thursday that seem likely to increase volatility in reported profits for many insurers and lower reported revenue for rapidly growing companies, as noted by Floyd Norris of The New York Times. “The proposed standard is intended to bring greater consistency and relevance to the accounting for contracts that transfer significant risk between parties,” said Leslie F. Seidman, FASB chairwoman. “Current U.S. standards on insurance have evolved over the years as new products have been introduced, leading to some inconsistencies” in insurance accounting. Important Change for Some Life…