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Deloitte comment letter on IASB ED/2013/7 "Insurance Contracts"

Published on: Oct 25, 2013

Deloitte Touche Tohmatsu Limited has responded to the IASB’s exposure draft ED/2013/7 Insurance Contracts ("the 2013 ED").

We remain fully supportive of the objectives that the Board is attempting to fulfill in this phase of the insurance contract project. A comprehensive standard on accounting for insurance contracts will be of great benefit to investors and will improve financial reporting given the lack of an IFRS in this area. We are also supportive of the time spent with the FASB in trying to achieve a converged solution.

We note that the boards continue to have different views on certain aspects and would urge them to focus on those differences as part of their joint redeliberation of their exposure drafts in the coming months. Joint redeliberations should not, however, detract from the IASB’s objective of finalizing a standard in the near term. The 2013 ED presents important improvements relative to exposure draft ED/2010/8 Insurance Contracts. We are generally supportive of the boards’ approach to unlocking of the Contractual Service Margin, the presentational split of interest expense from insurance contracts between profit or loss and other comprehensive income (the “OCI solution”), and the new transition provisions. However, we have specific concerns about some of these aspects.

Download the full comment letter below.

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