Accounting Regulations
Accounting Regulations
Introduction
Risk Management
Financial Economics of Insurance
Underwriting Risks: Life Risk and Non-life Risk
Investment Risks: Market, Credit and Liquidity Risk
Non-financial Risks: Operational and Business Risk
The Financial Crisis: Consequences for Insurers
Insurance Supervision: From Solvency I to Solvency II
Insurance Supervision Outside the EU
Pillar I of Solvency II
Pillar II of Solvency II
Pillar III of Solvency II
Accounting Regulations
Banking Supervision: From Basel I to III
Management Control
Organising Risk Management
Bringing All the Strands Together
At the same time that Solvency II was being developed, the European regulations for accounting for insurance products were also being updated. As mentioned in Chapter 9, there is a traditional difference between the publicly disclosed financial accounts and the accounts for prudential purposes, the statutory accounts. Although the differences between these accounts have not always been that great, in the early 2000s they did increase. This chapter will therefore discuss how the IFRS4 initiative will work to close that gap. IFRS4 has been split into two phases, with the initial version being published in 2004. However, further refinements were deemed necessary, leading to the IFRS4 phase II project, which we will also examine.
We will look at the differences of objectives and scope between Solvency II and the ultimate IFRS4 framework, before exploring some additional elements but without addressing too much of the detail. We will see that Solvency II and IFRS4 have many similarities, but that some differences are likely to persist.
FAIR VALUE IN ACCOUNTING
The accounting framework for insurance companies in Europe is laid down in the International Financial Reporting
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