Important Dates

03/15/2010

Ratemaking & Product Management (RPM) Seminar

03/22/2010

Board Meeting

03/23/2010

MAF Spring Meeting

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White Paper on Fair Valuing Property/Casualty Insurance Liabilities

This white paper was undertaken by the CAS Task Force on Fair Value Liabilities in reaction to developments by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Committee (IASC). It is meant to be an objective discussion of the issues surrounding the fair valuing of property/casualty insurance liabilities, particularly in the United States.

The White Paper can be downloaded in its entirety, or individual chapters can be downloaded. The chapters are Portable Document Format (PDF) files. You will need the Adobe Acrobat Reader to view the documents. If you have any questions, read our Adobe FAQ page.

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Download White Paper (Word)(PDF)

Table of Contents

Executive Summary

Table of Contents

Introduction

Section A - Background

Section B - Fair Value in the Insurance Context

Section C - Alternatives to Fair Value Accounting

Section D - Methods of Estimating Risk Adjustments

Section E - Accounting Presentation Issues

Section F - Implementation Issues

Section G - Accounting Concepts

Section H - Credit Standing and Fair Value Liabilities

Section I - Professional Readiness

Section J - Summary and observations

Section K - Technical Appendices (Word)(PDF)

Appendix 1: CAPM Method

Appendix 2: IRR Method

Appendix 3: Single Period RAD model

Appendix 4: Using Underwriting Data

Appendix 5: The Tax Effect

Appendix 6: Using Aggregate Probability Distributions

Appendix 7: Direct Estimation of Market Values

Appendix 8: Distribution Transform Method

Appendix 9: Credit Risk

Appendix 10: References

Research Section