IAIS calls for simpler accounting

With the aim of improved transparency and comparability in financial standards, the International Association of Insurance Supervisors (IAIS), encouraged by the latest G20 recommendations, has called on other regulatory bodies to reduce accounting complexity. IAIS has urged the US International Accounting Standards Board to simplify the standards for financial instruments. IAIS Technical Committee said that “a converged worldwide valuation standard would help supervisors in their evaluation of insurers around the world.” Al Gross, the committee’s chairman, noted that “the insurance industry has weathered the crisis well… but …the financial sector has seen far too many cases of over-optimistic valuations”. The IAIS is also pressing for closer cooperation between supervisors in order to assist the spotting of aberrant practices. Simplified and harmonised accounting rules would also reduce regulatory arbitrage as well as clarify solvency evaluation for supervisors and other financial experts.