U.S. Regulators Eye International Accounting Standards

- Creditworthiness: Some task force members are arguing that a life insurer’s creditworthiness is irrelevant in the calculation of liabilities. Those task force members say a life insurer owes what it owes regardless of how ratings change. “We need a true picture of how much capital a company has,” says Bill Carmello, a New York regulator.

- Valuation tools: Some task force members say secondary markets and reinsurance markets could help with valuation of policy liabilities, even when secondary markets and reinsurance markets aren’t readily available.

- Discount rates: The IASB is deciding what discount rates ought to be used in valuing policy liabilities. Task force members are pointing out that the NAIC is currently working on a C-3, Phase II risk-based capital and reserving project that incorporates discount rates at levels that are roughly equal to risk-free returns.