January 2012

Year End Update

The past year certainly has been action packed with respect to standard setting activity in the industry at the National Association of Insurance Commissioners (NAIC), Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB).  There were many interesting developments, and their resolution is likely to be the driver for newsworthy items in 2012. Here is a recap of some of the more interesting news.

Accounting Standard Setting at the FASB and IASB

The FASB and the IASB continued to struggle with three significant accounting standards: revenue recognition, leases and financial instruments. 2011 began with the expectation of issuing all three standards by the end of the year, yet none of them was actually issued. Revenue recognition was significantly revised with improvements and re-exposed for comment in November. The boards expect to finalize deliberations on the lease standard sometime before the end of the second quarter, which will lead to re-exposure of that standard. With respect to financial instruments, the boards continue to struggle with consensus.  Stay tuned.

Read the full story here...

NAIC Update

Deferred Income Taxes

In November 2011, the NAIC plenary approved SSAP No. 101, Income Taxes, A Replacement of SSAP No. 10R and SSAP No. 10 (SSAP No. 101)SSAP No. 101 is intended to be a permanent solution to SSAP No. 10R.  The most substantial change under SSAP No. 101 is the use of a tabular formula to calculate the admitted adjusted gross deferred tax assets. 

Read the full story here...

Solvency Modernization Initiatives

Model Holding Company Law

The NAIC continues its solvency modernization initiatives by requiring holding company filings  for data collection, including updating the requirements for Form B. 

Read the full story here...

International Financial Reporting Standards Update

IASB and FASB Insurance Contracts Project

The Financial Accounting Standards Board  (FASB) and International Accounting Standards Board  (IASB) continue to deliberate and debate various details regarding the Insurance Contracts Project, including the use of a Premium Allocation Model for short duration contracts which is somewhat similar to the current FASB insurance contracts model,  the appropriate model for discounting, whether deferred acquisition costs should be on a successful efforts basis, whether certain warranty contracts should be included in the scope of IFRS 4, treatment of taxes paid on behalf of policyholders, accounting for ceded reinsurance and whether certain changes in the insurance liabilities should be reported in comprehensive income.  Both the IASB and FASB hope to issue exposure drafts in 2012, although it is expected that there will continue to be differences between the IASB and FASB accounting.

U.S. GAAP Update

Fair Value Measurements and Disclosure Requirements

On May 12, 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU or Update) 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which is codified under Accounting Standards Codification (ASC) Topic 820. 

Read the full story here...

Patient Protection and Affordable Care Act Update

CLASS Act, No Longer a Viable Option

On Friday October 14, the Community Living Assistance Services and Supports or CLASS Act, a seminal component of the Healthcare Reform legislation was officially abandoned after Health and Human Services Secretary Kathleen Sebelius wrote that “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.”

Read the full story here...

If you have any questions regarding this e-mail blast, please contact Ken Hugendubler, partner and head of ParenteBeard’s Insurance Practice at 717.236.1100 or [email protected].

ParenteBeard LLC: Confidence Through Clarity