2018年-普华永道全球_Imminent_accounting_changes_for_long_3页_141kb

报告摘要

FASB ASU 2018-12: Key Changes for Long-Duration Contracts

Core Content

The FASB issued Accounting Standards Update (ASU) 2018-12, titled Targeted Improvements to the Accounting for Long-Duration Contracts, which introduces significant changes to the measurement models and disclosure requirements for long-duration contracts issued by insurers and reinsurers. This update affects the accounting treatment of liabilities for future policy benefits, deferred acquisition costs (DAC), and market risk benefits (MRBs), and will take effect starting January 1, 2021.

Main Changes

1. Liability for Future Policy Benefits

Annual Update Requirement: Cash flows and net premium ratio must be updated annually for changes in insurance assumptions (e.g., mortality, morbidity, terminations), or more frequently if needed.
Retrospective Catch-Up: The effect of updating cash flow assumptions will be measured retrospectively and presented separately in the statement of operations.
Elimination of Adverse Deviation Provision: No longer required to provide for adverse deviation.
Net Premium Ratio Cap: Replaced the current premium deficiency test with a cap of 100% on the net premium ratio, excluding acquisition costs.
No Aggregation Across Issue Years: Contracts from different issue years cannot be grouped, leading to a lower level of aggregation.
Standardized Discount Rate: A fixed-income corporate instrument yield of upper-medium grade (essentially "single A" in the U.S.) will be used, reflecting the duration of the liability. This differs from the previous requirement to use expected investment yields.
Locked-in Rate for Income Statement: A locked-in rate will be used for periodic net premium ratio calculations and interest accretion.
Discount Rate Changes Recorded in OCI: For balance sheet remeasurement, changes in the discount rate will be recorded in other comprehensive income (OCI).

2. Market Risk Benefits (MRBs)

New Definition of MRBs: MRBs are features that both protect the contract holder from other-than-nominal capital market risk and expose the insurer to such risk.
Fair Value Accounting: Features that meet the MRB definition must be accounted for at fair value.
Separate Presentation: MRBs must be separately presented in the balance sheet and statement of operations.
Credit Risk Component: Changes in fair value due to credit risk are recognized in OCI, while changes due to other factors are recognized in the income statement.

3. Simplification of DAC Amortization

Straight-Line Amortization: DAC will be amortized on a straight-line basis over the expected life of the contract, regardless of profitability.
No Interest Accrual or Impairment Test: Interest will not accrue on the DAC balance, and DAC will not be subject to impairment testing.
Amortization Based on Incurrence: Acquisition costs will be amortized only as incurred, not from contract inception.
Applicability to Other Balances: The simplified amortization pattern applies to other balances that are currently amortized in line with DAC, such as sales inducement costs and front-end fees in universal life-type contracts.
Exclusions: The FASB has not changed amortization guidance for other balances (e.g., contract intangible assets, net cost of reinsurance) that insurers may choose to amortize in line with DAC.

4. Enhanced Disclosures

Disaggregated Rollforwards: Additional disclosures are required for the liability for future policy benefits, policyholder account balances, MRBs, DAC, and sales inducements.
Qualitative and Quantitative Estimates: Entities must provide qualitative and quantitative information about expected cash flows, estimates, and assumptions.

Transition

Modified Retrospective Approach: The new guidance is adopted using a modified retrospective transition method, "pivoting" off existing balances at transition.
Optional Full Retrospective: Entities may elect a full retrospective transition if certain criteria are met.
DAC Transition Consistency: The transition approach for DAC must align with the transition applied to the liability for future policyholder benefits.
Early Data Capture Required: Insurers must begin capturing and retaining additional data as early as January 2019 to support the new requirements.

Effective Dates

Public Business Entities: Effective for calendar year-end entities on January 1, 2021.
Other Entities: Have an additional year to adopt the guidance.
Earlier Application Permitted: Entities may apply the guidance earlier if they choose.