The IAA is pleased to announce the successful completion of a Request for Proposal to author an international educational monograph on the topic of issues associated with the determination of discount rates for financial reporting purposes, scheduled for completion in September 2011.

Determination of Discount Rates is clearly a key topic today and will continue to be well into the future. The use of discount rates applies to most actuarial calculations, including regulatory reporting, international financial reporting, economic capital development, principles-based approaches to reserve and capital determination, fair value reporting for assets and liabilities, and enterprise risk management.

The educational monograph will address concepts and practical methods that are being used in the application of the discounting process for the purpose of financial reporting, capital assessment and internal management reporting of (1) insurance companies and (2) pension and employee benefits obligations on the sponsor entity. It will also provide a number of case studies based on real life examples as performed globally by actuaries, insurance companies, and pension plan sponsors.

This monograph forms an important part of the IAA’s research and educational objectives, to facilitate and provide useful educational material that is accessible to actuaries everywhere.

The project has been awarded to the firm of Milliman, Inc., an independent actuarial and consulting firm founded in 1947.

This project has been made possible through the generous support of the following actuarial organizations:

The Actuarial Foundation (United States)
Canadian Institute of Actuaries (Canada)
Casualty Actuarial Society (United States)
Financial Reporting Section of the Society of Actuaries (United States)
Institute of Actuaries of Australia (Australia)
Institute and Faculty of Actuaries (United Kingdom)

In addition to their financial support, these organizations have appointed representatives who will provide technical guidance and ongoing monitoring of the project as members of the ad hoc Project Oversight Group (APOG) created to oversee the project. Other members include the leadership of the IAA Committees on Enterprise and Financial Risk, Insurance Accounting and Pensions and Employee Benefits.

To learn more about the work of the IAA on this topic, contact the IAA Secretariat, care of the Chairperson of the APOG.