January 16, 2012

Educational Monograph: Adjustment for Risk for Financial Reporting Purposes

version française

The IAA is pleased to announce the successful completion of a Request for Proposal to author an international educational monograph on the Adjustment for Risk for Financial Reporting Purposes, scheduled for completion in April 2013.

Risk and uncertainty are key factors that actuaries consider in a wide range of practice. Inclusion in general purpose financial reporting is no exception. In the measurement of the liabilities of insurance contracts, the principle that the liabilities should reflect the risk and uncertainty associated with the effect of the obligations and rights provided in the insurance contracts is firmly established in many countries. Nevertheless, the methods of reflecting them are still evolving.

The monograph will address the application of risk and uncertainty to the measurement of the liability of insurance contracts in the context of general purpose accounting as adopted by the International Accounting Standards Board (IASB). Although actuarial literature and regulation around the world are full of examples of methods used to quantify risk and uncertainty, only a handful of financial reporting requirements in a limited number of small jurisdictions currently require an explicit adjustment for risk of the type contemplated in the upcoming revision to IFRS 4. These applications call for more refined and explicit techniques than some actuaries have historically applied.

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, which has been awarded to the firm of Deloitte Consulting LLP, an international actuarial and consulting firm, has been made possible through the generous support of the following actuarial organizations:

  • Institute of Actuaries of Australia (Australia)
  • Canadian Institute of Actuaries (Canada)
  • Institute of Actuaries of Japan (Japan)
  • Institute and Faculty of Actuaries (United Kingdom)
  • The Actuarial Foundation’s James C.H. Anderson Fund (United States)
  • Casualty Actuarial Society (United States)
  • Financial Reporting Section of the Society of Actuaries (United States)
  • The ASTIN Section of the IAA
  • The AFIR/ERM Section of the IAA

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 Insurance Accounting and Insurance Regulation.

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

The International Actuarial Association (IAA) is the worldwide association of professional actuarial associations, with a number of special interest sections for individual actuaries. The IAA exists to encourage the development of a global profession, acknowledged as technically competent and professionally reliable, which will ensure that the public interest is served.
International Actuarial Association | Association Actuarielle Internationale
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