Insurers Seek Extension of Insurance Standard’s Effective Date
July 26, 2018
Principal Financial Group and the American Council of Life Insurers want the Financial Accounting Standards Board (“FASB”) to delay the effective date of its proposed insurance standard by at least one year. In separate letters to the FASB, the insurance companies argue a lack of resources and the need to overhaul existing systems will prevent them and other insurers from implementing the accounting changes before the projected 2021 effective date for public companies.
The FASB is currently reviewing the delay request. In the meantime, the board is targeting an August release for its final amendments to guidance concerning insurance company-issued long duration contracts. Based on a proposed Accounting Standards Update issued in September 2016, the final accounting changes will likely overhaul how insurance companies calculate their liabilities for long-term policies they provide to customers. Insurers and other companies anticipate the changes to require an entirely new approach on how they revise key assumptions when estimating liabilities.