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Insurance Contracts

Date recorded:

This was an educational session and no decisions were made.

Representatives from the insurance and reinsurance business held an educational session on reinsurance and insurance linked securities. This is the second of three educational sessions on insurance in conjunction with the development of the phase II project on insurance contracts.

Presenters gave an introduction on the aspects and nature of reinsurance. The session also covered the different types of reinsurance and the risk models reinsurance companies' use when assessing risks and premiums from insurers. The Board considered different accounting issues in conjunction with these types of contracts and specifically considered guidance on risk transfer to be one of the key issues.

At the end of this session Board members considered the accounting implications of the increasing market for insurance-linked securities (catastrophe bonds) used by insurance companies to deal with peak risks due to severe catastrophes.

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