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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Insurance organizations face unique financial reporting challenges due to complex product commitments, revenue recognition considerations, loss reserving requirements, investment accounting issues, reinsurance risk transfer evaluations and other issues specific to the insurance industry. This two-day course examines IFRS issues in detail and their effect on both life and non-life insurance entities. Our specialist instructors dissect the critical issues that go beyond mere number-crunching and explain, clearly and simply, the way the insurance industry conducts and shapes its accounting and reporting practices.

This comprehensive two-day program covers the most important accounting and reporting requirements for insurance companies (life and non-life), providing an overview of IFRS 4 Insurance Contracts and the latest developments emerging from the IASB’s Insurance Project Phase II .

The program provides a comprehensive overview of how IFRS 4 affects the financial statements of insurers. Course coverage includes the current requirements of IFRS 4 and the emerging developments included in the IASB’s IFRS Exposure Draft for Insurance Contracts published in July of 2010. Practical guidance and illustrations are presented to help delegates understand the new requirements.

These requirements are explained and illustrated with the use of a model annual report. Application of the various standards is illustrated through the use of short case studies.

The course answers questions such as:

• How should acquisition costs, investments, and reserves be recognized and measured?

• What are IFRS requirements and industry practices for presentation and disclosures in the financial statements?

• What are the key features of IFRS 4?

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

Prerequisites

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Understanding of basic 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
• International Accounting Standards Board (IASB) – impact of their pronouncements on the industry
• Types of Insurance Contracts
• Short-duration contracts (non-Life)
• Long-duration contracts (Life)
• Deposit-type contracts (non-insurance)
• Accounting for Acquisition Costs
• Short-duration contracts
• Long-duration contracts
• Traditional (whole life, term life)
• Loss recognition (premium deficiency)
• Accounting for Investments
• Equity and fixed income investments – available-for-sale, trading, held-to-maturity
• ‘Shadow’ DAC
• Unbundling
• Derivatives and hedging
• The ‘Fair Value’ Option
• Reserving Methods and Analysis
• Aggregate life reserves
• Accident and health reserves
• Annuity reserves and product guarantees
• Non-life reserves
• Case and IBNR reserves
• Unearned premium reserves
• Derecognition
• Uncertainty in cash flows and methods of dealing with this (eg PADs, risk adjustments, cost of capital)
• Components of the income statement (expected results, experience variances, assumption changes, investment variances and overheads)
• Reinsurance Accounting and Reporting
• Purposes of reinsurance
• Types of reinsurance
• Facultative vs. treaty
• Prospective vs. retrospective
• Reinsurance accounting
• Transfer of risk criteria
• Deposit accounting
• Financial Statement Analysis
• Financial statement presentation
• Balance sheet
• Income statement
• Cash flow statement
• Disclosures
• Performance measures
• 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
• Disclosures
• Insurance Project Phase II
• Background and goals of the project
• Tentative conclusions
• Exposure Draft and Basis for Conclusions
• Exit value vs. fair value
• Convergence with US GAAP

Course Benefits

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• Understand the objectives and framework for IFRS financial reporting
• Comply with IFRS accounting and reporting for insurance companies
• Discern the major features of IFRS 4
• Review July 2010 Exposure Draft from Phase II of IASB’s Insurance Project and subsequent developments since then
• Prepare for likely next steps in insurance accounting and reporting under IFRS

Teaching Method

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• Live group instruction with interactive participation encouraged
• Description and explanation of IFRS and accounting principles and international practices for insurance companies
• Practical illustrations using model financial statement disclosures and case studies.
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Bring This Course In House

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To bring this course in-house please contact us and we will be pleased to assist.

Continuing Professional Education (CPE)

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16 hours

Venue

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All of our Zurich 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. .