Course detail

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Contents

• Introduction
• Prerequisites
  
• Course Level
  
• Topics
  
• Course Benefits
  
• Teaching Method
  
• Continuing Professional Education
  
• Venue
  
  

Introduction

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This comprehensive three-day course provides an overview of the most important accounting and reporting requirements for insurance companies (life and non-life) in accordance with US GAAP FASB standards 60, 97, 109, 113, 115 and other applicable pronouncements under US GAAP, as well as IFRS 4 and the latest developments emerging from the IASB’s Insurance Project Phase II.

The course includes a review of significant accounting policies and necessary disclosures, in accordance with the pronouncements of:

• The Financial Accounting Standards Board (FASB)

• The Securities Exchange Commission (SEC)

• The Emerging Issues Task Force (EITF)

• The American Institute of CPAs (AICPA)

• The International Accounting Standards Board (IASB)

The program provides a comprehensive overview of how US GAAP and IFRS (and in particular IFRS 4) affect the financial statements of insurers. Course content includes a review of the major differences between IFRS 4 and US GAAP. The Discussion Paper for Phase II of the IASB Insurance Project issued in May of 2007 is also discussed. Practical guidance and illustrations are presented to help delegates understand the new requirements.

This valuable course answers questions such as:

• What are the current and likely future reporting requirements under US GAAP?

• What are the key features of IFRS 4?

• How does US GAAP compare with IFRS 4?

• What unresolved issues are being addressed by Phase II of the IASB’s Insurance Project?

• What are the likely next steps in Phase II of the IASB’s Insurance Project?

Prerequisites

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Understanding of basic US GAAP/IFRS accounting and reporting principles.
No advance preparation is required for this course.

Course Level

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Intermediate

Topics

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• Financial Overview of the Insurance Industry
• State of the industry
• Regulatory environment
• Securities & Exchange Commission (SEC)
• International Accounting Standards Board (IASB)
• State regulators and NAIC in United States
• Current accounting/financial issues
• Types of Insurance Contracts
• Short-duration contracts (non-life)
• Long-duration contracts (life)
• Deposit-type contracts (non-insurance)
• Revenues and expenses, including product classification and contingent commissions
• Accounting for Acquisition Costs
• Short-duration contracts
• Long-duration contracts
• Traditional (whole life, term life)
• Nontraditional (universal life) – loss recognition (premium deficiency)
• DAC for internal replacements
• Accounting for Investments
• Equity and fixed income investments – available-for-sale, trading, held-to-maturity
• 'Shadow' DAC
• Derivatives and hedging (FAS 133, IAS 39)
• The 'Fair Value' Option (FAS 157, 159)
• Intangibles and goodwill
• Value of Business Acquired (VOBA)
• Impairments and impairment tests
• Reserving Methods and Analysis
• Aggregate life reserves
• Accident and health reserves
• Annuity reserves and product guarantees
• Non-life reserves
• Case and IBNR reserves
• Supplemental and bulk reserves
• Unearned premium reserves
• 'Conditional' reserves
• Reinsurance Accounting and Reporting
• Purposes of reinsurance
• Types of reinsurance
• Indemnity reinsurance
• Assumption reinsurance
• Proportional vs. nonproportional
• Facultative vs. treaty
• Prospective vs. retrospective
• Recapture and commutation
• Reinsurance accounting
• Transfer of risk criteria
• Finite/Financial reinsurance
• Deposit accounting
• Impact on financial performance
• Recent developments
• Financial Statement Analysis
• Financial statement presentation
• Balance sheet
• Income statement
• Cash flow statement
• Disclosures
• Traditional GAAP financial measures
• Non-GAAP measures
• Regulatory measures
• Rating agency measures
• Capital adequacy measures
• Operations analysis
• Financial forecasting
• International Financial Reporting Standard 4
• Background and reasons for issuance
• Scope and applicability
• Interrelationships with other IFRS/IAS standards
• IASB’s definition of an insurance contract
• Embedded derivatives
• Unbundling of deposit components
• Temporary exemptions
• Liability adequacy tests
• Changes in accounting policies
• Continuation of existing practices
• Future investment margins
• Shadow accounting
• Insurance contracts acquired
• Accounting for guaranteed elements
• Disclosures
• Reconciling IFRS to US GAAP
• Insurance Project Phase II
• Background and goals of the project
• Tentative conclusions
• Discussion paper
• Exit value vs. fair value
• Market participant servicing costs
• Estimating future cash flows
• Discount rates for interest cash flows
• Estimating the margin
• Acquisition costs
• Unbundling of insurance contracts
• Participating contracts
• Convergence with US FASB
• Alternative accounting models
• Next steps

Course Benefits

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• Understand the objectives and framework for US GAAP financial reporting
• Comply with US GAAP accounting and reporting for insurance companies
• Apply key requirements of FAS 60, 97, 109, 113, 115, 133, 159, 161 affecting insurers
• Comprehend key GAAP and Non-GAAP financial measures
• Compare US GAAP accounting with international accounting for insurers
• Discuss current issues being debated by the FASB, EITF, IASB and others
• Discern the major features of IFRS 4
• Appreciate key issues under discussion in Phase II of IASB’s Insurance Project
• Gain familiarity with key concepts expected to be included in the Discussion Paper
• Prepare for likely next steps in insurance accounting & reporting under IFRS

Teaching Method

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• Live group instruction, with interactive participation encouraged
• Description and explanation of US GAAP accounting principles for insurance companies
• Practical illustrations using model journal entries, model financial statement disclosures, case studies, and real-world examples
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Continuing Professional Education (CPE)

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24 hours

Venue

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All of our Dubai seminars take place in 4 star professional conference facilities, usually in city-centre downtown hotels like the Marriott, Sheraton or Hilton brands.

Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available.

Coffee and lunch will be provided.