Insights Into the Insurance Expert Panel Activities
By Josh Keene, CPA, Partner, Johnson Lambert LLP
The AICPA Insurance Expert Panel (IEP) works to actively address accounting and auditing issues facing the insurance industry. In December each year, the IEP meets for a full day of face-to-face meetings in Washington, D.C., followed by a liaison visit with the staff of the Securities and Exchange Commission (SEC). Here are some highlights from the December 2015 meetings.
Continue Reading from eInterpreter...
The IEP members spent the majority of their day on discussions evaluating various potential implementation issues for the new loss reserve disclosure requirements issued by the FASB under ASU 2015-09. These new disclosures require inception to date loss development and paid loss “triangles” by accident year as well as various other disclosures within the financial statement footnotes for the periods presented and as required supplemental information outside the financial statements. The IEP discussed the auditor opinions under generally accepted auditing standards (GAAS) and the standards of the PCAOB. Additionally, the IPE discussed implementation issues impacting the inception to date disclosure information related to foreign currency exchange rates and business combinations (acquisitions/dispositions) as well as possible implementation issues regarding claim counts.
The IEP also discussed the impact of the ASU 2015-09 disclosures for entities that prepare statutory-basis financial statements. There is good news for statutory filers! If the NAIC does not adopt the GAAP disclosures, the audited statutory-basis financial statements would not need to include the full 10-year disclosures as supplemental information. Only the disclosures relating to the current years covered by the financial statements would need to be evaluated for inclusion in the statutory audited statements under GAAS.
The following day, the IEP met with the staff of the SEC to relay the status of various accounting developments and to hear from the SEC staff regarding their observations on insurance entity filings. The SEC staff provided observations for improving compliance with the disclosures for fair value measurements, techniques, and inputs to the measurements as well as reminding filers regarding disclosures for loss reserve changes, minimum capital and surplus/dividend restrictions, and the low interest rate environment. The IEP shared with the SEC the implementation issues regarding ASU 2015-09 and the possible impact to insurance entities resulting from the new revenue recognition guidance.
For more information, contact Josh Keene, at firstname.lastname@example.org.