Risk Management/Financial Reporting Council

Risk Management/Financial Reporting Council Highlights

The Risk Management/Financial Reporting Council:

Conducted two webinars on financial regulatory reform. A webinar on April 20 outlined federal regulatory responses to the financial crisis and their potential effects on the life and casualty insurance industry. Panelists discussed proposals for modernizing financial services regulation and examined reactions to proposals from Congress, the National Association of Insurance Commissioners (NAIC), and the Academy. A webinar on Oct. 5 provided an overview of the Dodd-Frank Act, and included a discussion of the law’s components that would affect the insurance industry, as well as the work the Academy had done on the law during the legislative process and now with its implementation.
Held a webinar discussing the implications of the changes to general purpose insurance contract accounting in the proposed Insurance Contracts exposure draft by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). The webinar was an introduction to the current work of the IASB affecting insurance, and provided an overview of the Contracts technical document.
Sent comments to the IASB on its Insurance Contracts exposure draft and to the FASB on its parallel discussion paper.
Sent a letter to Senate and House leadership urging Congress to include an Office of the Chief Actuary in an Office of National Insurance as Congress reconciled financial reform legislation H.R.4173 and S.3217. The council met with representatives of the Treasury Department, including the assistant secretary for financial institutions to discuss the newly established Federal Insurance Office and the importance of actuarial resources in the Federal Insurance Office and Office of Financial Research. The council also provided testimony to the Senate Committee on Agriculture, Nutrition, and Forestry supporting the establishment of a governmental systemic risk regulator.
Released the Role of the Systemic Risk Regulator white paper, which outlined new key functions necessary for effective systemic risk regulation.
Submitted a final report to the NAIC’s Capital Adequacy (E) Task Force outlining the appropriate treatment of deferred tax assets in the risk-based capital formulas for life, property/casualty, and health.
Submitted comments to the International Association of Insurance Supervisors on its Guidance Paper on Capital Adequacy for Regulatory Solvency Purposes and on its Draft Standard on Group-wide Regulatory Requirements and Guidance on Group-wide Supervision Framework.
Presented comments to the NAIC on its consultation paper, Own Risk and Solvency Assessment for the Solvency Modernization Initiative, at the NAIC’s fall meeting.
Commented to the NAIC’s Solvency Modernization Initiative (EX) Task Force on its Consultation Paper on Corporate Governance and Risk Management and responded to questions posed in the Consultation Paper on Regulatory Capital Requirements and Overarching Accounting and Valuation Issues for the Solvency Modernization Initiative.
Discussed accounting practices in the health, property/casualty, and life practice areas during the council’s annual meeting with the American Institute of Certified Public Accountants (AICPA). Discussed the IASB’s Insurance Contracts exposure draft in a subsequent call with AICPA.