U.S. insurance regulators are still deciding what to say about an international accounting standards project.[@@]

The International Accounting Standards Board, London, is working on a model for measuring the future liability associated with insurance contracts.

Regulators who belong to the Life & Health Actuarial Task Force at the National Association of Insurance Commissioners, Kansas City, Mo., continue to discuss fair value accounting, or the measurement of future liabilities.

But task force members have some ideas:

- 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.