If a single global insurance accounting standard is not achieved, PwC believes the FASB should only make targeted enhancements to its existing standards.
The FASB and IASB have been jointly deliberating insurance contract accounting since 2008. The intent was to issue a single standard that reflects a converged accounting model. However, the models the boards proposed in June are not converged in several important respects.
We encourage the boards to continue to work together with a goal of issuing a single, high-quality global standard on insurance contract accounting. High-quality global accounting standards would improve the ability of stakeholders to compare companies across territories and would enhance the efficiency of capital allocation around the world.
If the boards cannot achieve the goal of a single, high-quality standard, we do not believe the FASB should forge ahead with a new model. Rather, we recommend the FASB make targeted enhancements to its existing standards in a few key areas. These would address some of the more significant limitations of the current model in a cost-beneficial way.