The U.S. Securities and Exchange Commission has included a discussion of international insurance regulatory efforts in a new final financial report rule.
The final rule, which appears today in the Federal Register, permits foreign companies to file financial statements prepared according to International Financial Reporting Standards with the SEC without reconciling the statements with U.S. Generally Accepted Accounting Principles.
SEC officials note in the preamble to the final rule that the International Accounting Standards Board, London, is still working on fleshing out international rules for accounting for insurance and reinsurance contracts.
“Accounting for insurance contracts was the area most frequently cited by commenters as lacking complete standards,” SEC officials write in the preamble.
But most commentators said IFRS rules already require considerable disclosure and noted that European investors are using financial statements prepared by insurers under IFRS to make financial decisions, officials write.
“The IASB continues to make progress towards developing standards under IFRS for … insurance … activities,” officials write. “As we accept and support the use of IFRS as issued by the IASB as a comprehensive basis of accounting for the preparation of financial statements included in filings with the commission by foreign private issuers, we do not believe that the IFRS standards in these or other discrete areas should delay our full acceptance of IFRS as issued by the IASB without a U.S. GAAP reconciliation.”
A copy of the final rule is available