PwC's annual report for a life insurance group is a practical guide to UK accounting law and best practice for insurers preparing their financial statements in accordance with the requirements of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 relating to insurers and the Association of British Insurers' Statement of Recommended Practice on Accounting for Insurance Business. The illustrative annual report considers the requirements of relevant accounting standards, Urgent Issues Task Force Abstracts and other UK Generally Accepted Accounting Principles (GAAP). This report can be used by preparers, reviewers and users of insurers' financial statements. It is worth noting that the suggested disclosure throughout is intended for guidance only and would not be applicable to all groups or to all companies.
The latest updated version is prepared as at 31 December 2013 and reflects the accounting requirements at that date.
We are not updating Proforma-Life and Proforma-Gen for the 2014 year end because prior to the implementation of New UK GAAP there are no changes to old UK GAAP. Instead we have produced the following summary of areas to consider when preparing financial statements for 2014.
New guidance on the Strategic Report
The Financial Reporting Council (FRC) published Guidance on the Strategic Report in June 2014. The guidance is written with the requirements for quoted companies in mind but the underlying concepts are intended to represent best practice for all companies required to prepare a strategic report. The guidance is intended to have persuasive rather than mandatory force, so companies do not need to follow it or explain where they have not done so. For more information please refer to In brief UK 2014-08.
There are no major taxation changes for the 2014 year end. However, the UK main corporation tax rate was reduced to 21% from 1 April 2014 and will be further reduced to 20% from 1 April 2015. These rates must be used to calculate 2014 tax and deferred tax balances and the wording of the notes will need to be adjusted accordingly.
Life model updated
The assumption used for future annuitant mortality improvements in Proforma-Life is based on the 2012 release of the projection model first provided by the CMI in 2009. An updated version of this model, CMI_2013, was published in September 2013 and a further version, CMI_2014 is expected to be published in October 2014.
If you wish to discuss any aspect of insurance financial reporting, please contact the author, Mike Vickery, +44 (0) 117 923 4222, or your usual PwC contact.