EFRAG's draft comment letter on Insurance

Insurance Contracts DP Comment Letters International Accounting Standards Board 30 Cannon Street London EC4M 6XH UK xx November 2007 DRAFT COMMENT LETTER Comments should be sent to Commentletter@efrag.org by 23 November 2007 Dear Sir/Madam, IASB Discussion Paper Preliminary Views on Insurance Contracts On behalf of the European Financial Reporting Advisory Group (EFRAG), I am writing to comment on the IASB Discussion Paper Preliminary Views on Insurance Contracts (the DP). This letter is submitted in EFRAG’s capacity as a contributor to the IASB’s due process and does not necessarily indicate the conclusions that would be reached in its capacity of advising the European Commission on endorsement of the definitive standard when it is issued. Currently, there is diversity in the accounting practices that are applied in accounting for insurance contracts: similar contracts are accounted for differently and insurers and other sectors account for similar things differently. There is also room for improvement in the way insurance contracts are accounted for. The IASB issued an interim standard (IFRS 4 Insurance Contracts) in 2004 to make some limited improvements, and the objective now is to develop a comprehensive high-quality standard on the subject. The DP represents the first step in that process. EFRAG welcomes the publication of the DP, which it believes represents a very important step in the development of a much-needed accounting ...