The IASB and FASB staff for Insurance Contracts introduced the summary comment letter analyses for the ED/2010/8 (IASB) and the Insurance Contracts Discussion Paper (FASB). The staff and the Boards identified several first level issues identified in the comment letters and as a result of other outreach activities (including Round-table meetings with constituents, field tests and other meetings with constituents) during the exposure period.

The Boards, and in particular the IASB, are faced with a desire and need expressed by IFRS users, to issue an IFRS as quickly as possible. However, balancing that are concerns that high-quality financial reporting standards are issued by both Boards and that quality not timeliness should be the overriding objective of the Boards.

Board members noted that there was no clear consensus emerging from those who did not like the Boards proposals. There were a number of strong minority views, but there was no preponderance of any particular alternative.

Critical issues identified by the staff include the discount rate; risk margins and risk adjustment; unbundling components of insurance contracts; the modified/simplified approach for short-duration contracts; and presentation.

When asked whether the staff had been able to identify an anchor issue around which strategic direction could be achieved and the amount of revisiting issues during redeliberations could be minimised, it was apparent that there was no such issue, although presentation and the risk margin/risk adjustment might together provide some direction.

No decisions were made during the meeting. However, several Board members from both Boards gave indications of areas in which they had strong views. For example, financial statement presentation: that any IFRS should portray economic mismatches accurately and that accounting should not mask the economics.

Detailed redeliberations are expected to begin in February 2011, with some of the first order issues likely to be discussed, including risk adjustment vs composite margin and composite vs residual margin approaches. Both are issues on which the IASB and FASB have fundamental disagreements.