FASB Decision is a “Major Victory” for U.S. Insurers: NAMIC

INDIANAPOLIS, Feb. 27, 2014 /PRNewswire-USNewswire/ — The decision by the
Financial Accounting Standards Board today to abandon its convergence efforts
with the International Accounting Standards Board on insurance contracts
represents a major victory for the U.S. insurance industry, according to the
National Association of Mutual Insurance Companies. The FASB will instead retain
the existing GAAP standards for insurance entities.

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Charles Chamness, president and CEO of NAMIC, said FASB made the right decision
to keep what he called “the gold standard” of insurance accounting methods. “For
the past year, we have forcefully advocated against changes to GAAP accounting
for insurance contracts that would deviate significantly from current statutory
accounting reporting requirements. GAAP are universally recognized as the gold
standard in the world of accounting, and we’re obviously very pleased the FASB
came to agree with us.”

Responding to initiatives by the FASB and IASB, NAMIC mounted a multi-faceted
campaign to thwart the imposition of the new international requirements on U.S.
GAAP. NAMIC engaged member companies to submit letters to both the FASB and
IASB. More than 70 comment letters were filed, which unanimously objected to any
shift away from the existing requirements.

NAMIC worked closely with staff at the National Association of Insurance
Commissioners during its analysis of the IASB and FASB exposure drafts. In
addition, it communicated concerns to the Federal Insurance Office and other
federal agencies. NAMIC staff also participated in a FASB-sponsored roundtable
discussion on the issue in December.

NAMIC is the largest property/casualty insurance trade association in the
country, serving regional and local mutual insurance companies as well as many
of the country’s largest national insurers. Its 1,400 member companies write
more than $196 billion in annual premiums and serve more than 135 million auto,
home and business policyholders.

Matt Brady
Director, Federal Public Affairs
mbrady@namic.org
202.580.6742

SOURCE National Association of Mutual Insurance Companies

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