Convergence of international accounting standards is something that many in the industry would like to see, but it was evident from the panel discussion that an international regime is still some way off. The trouble for those Bermuda companies dealing with a bifurcated international accounting system is juggling the demands both of International Financial Accounting Standards (IFRS) and those of the US’s Generally Accepted Accounting Principles (GAAP).
For Mark Wilcox, senior vice president, chief accounting offi cer and corporate controller at RenaissanceRe Holdings, the two systems had encouraged RenaissanceRe to move towards IFRS in its accounting practices, but he asked whether it wouldn’t be easier for all companies to move towards a single, global accounting and actuarial standard. This was particularly important for Bermuda companies that have developed an increasingly global footprint, he said.
ddressing the two systems, Stephen Robb, senior vice president and corporate controller at XL Group, said that there had been “no cry that US GAAP was broken”, rather re/insurers are looking to grapple withvaried international standards. He said that this was simply something that the industry would have to cope with. “Ultimately we will be globally regulated, so here at XL we have built accounting systems that respond to issues such as Solvency II” and refl ect the requirements of different international accounting standards. Nevertheless, Robb said that ideally there should be “global consensus around accounting standards”.
The FASB and IASB have been working together for several years to develop a single accounting standard for insurance contracts. “While many of the decisions on the features of the proposed models were made jointly with the IASB, there are a handful of differences of signifi cance and several relatively less signifi cant differences in scope, measurement, presentation and disclosures,” said Jennifer Weiner, senior practice fellow at the Financial Accounting Standards Board. “Regardless of whether the FASB and IASB’s standards are fully or partially converged, the new accounting models will likely signifi cantly improve comparability and consistency in the accounting for insurance contracts globally.”