EBA欧洲银行-cebs1238_2010-11-30-28CEBS-comments-ED-2010-829_5页_165kb

CEBS Comments on IASB Exposure Draft ED/2010/8: Insurance Contracts

Core Content

The Committee of European Banking Supervisors (CEBS) has provided comments on the International Accounting Standards Board (IASB) Exposure Draft ED/2010/8, which outlines a proposed model for accounting for insurance contracts. CEBS, composed of high-level representatives from banking supervisory authorities and central banks across the European Union, supports the initiative but emphasizes the need for consistency and clarity in the accounting treatment of insurance-related instruments, particularly in relation to other financial standards.

Main Views

1. Unbundling of Insurance Contract Components

• CEBS supports the concept of unbundling insurance contract components that are not closely related to the insurance coverage.
• They align with the IASB's approach, which aims to increase transparency and comparability by separating non-insurance elements.
• CEBS recommends that the criteria for unbundling should be consistent across IFRS 9 and the insurance contract standard.
• The term "closely related" should be clarified, as well as the concept of "account balance" mentioned in paragraph 8(a).

2. Liquidity Premium in Discount Rate Estimation

• CEBS acknowledges the IASB's proposal to include a liquidity premium in the discount rate used for measuring insurance liabilities.
• However, they note that this approach is controversial among insurance supervisors and requires further discussion.
• CEBS stresses the importance of clear disclosure of the liquidity premium in the financial statements due to the significant judgment involved.

3. Accounting Mismatches Between Assets and Liabilities

• CEBS is concerned that the ED's model may introduce volatility in the income statement due to the simultaneous re-measurement of insurance liabilities and financial assets.
• Insurers typically manage their business on a long-term basis, which may not be accurately reflected by annual performance measures that are sensitive to short-term market fluctuations.
• CEBS advocates for a debate on the definition and presentation of performance to ensure that financial statements reflect the true business model of insurers.

4. Risk Margin in Insurance Liabilities Measurement

• CEBS agrees with the inclusion of an explicit risk margin in the measurement model for insurance liabilities.
• They believe this enhances decision-useful information for users by incorporating uncertainties in future cash flows.
• This is consistent with previous CEBS comments on fair value measurement, emphasizing the need for enhanced disclosure of valuation techniques and adjustments.

5. Treatment of Financial Guarantees

• CEBS notes that the ED proposes to treat financial guarantees that are not derivatives as insurance contracts rather than financial instruments.
• They stress the importance of ensuring that the accounting model for financial guarantees:
  • Reflects economic substance
  • Results in robust and relevant measurement
  • Ensures consistency across standards
• CEBS believes that a comprehensive standard for financial guarantees would eliminate arbitrage opportunities and promote uniform treatment.
• They suggest that IFRS 9 is a more appropriate framework for financial guarantees due to its familiarity in the banking sector.
• CEBS recommends that the treatment under IFRS 4 or IAS 39 should result in comparable outcomes to prevent arbitrage.
• They encourage the IASB to revise impairment and measurement standards based on expected losses to achieve consistency.

Key Recommendations

• Clarify the concept of "closely related" and provide more guidance on unbundling.
• Ensure consistency in treatment and language across relevant standards.
• Mandate disclosures for:
  • The distinction between "doubtful" and other financial guarantees.
  • Exposure to credit risk from financial guarantee contracts.
  • Fees received from financial guarantee contracts.

CEBS emphasizes the importance of prudential considerations, market discipline, and comparability in the development of accounting standards for insurance contracts and related financial instruments.