Insurers are weighing in on discussions of internationalaccounting standards that will impact how they account forinsurance contracts on their financial statements.

Representatives of the carriers are attending joint roundtablediscussions of the Financial Accounting Standards Board and theInternational Accounting Standards Board being held today in theNorwalk, Conn., office of the FASB.

That discussion focuses on the development of a conceptualframework on measurement of assets and liabilities. It affects bothproperty-casualty and life insurers.

The effort is part of a project to develop a common frameworkusing the U.S. system and the international system, explained DougBarnert, executive director with the Group of North AmericanInsurance Enterprises, New York.

GNAIE is concerned with the predisposition to use a fair valuemeasurement in all cases, he said. Fair value offers a measure ofwhat an asset or liability is currently worth.

There are elements of fair value that do not work, particularlyfor property-casualty insurance, according to Mr. Barnert. Thereare times when a company's own information is unique enough thatentity-specific values are warranted, he continued.

Alan Close, representing the committee on accounting policy forthe American Council of Life Insurers, Washington, said that forinsurers fair value may not be the best measurement. What may be abetter measurement is a mixed model that could encompass a numberof different accounting methods such as amortized cost, fair value,historical cost or depreciated cost.

Today's meeting in Connecticut follows a meeting of the IASB inLondon on Jan. 23-25. On Jan. 25, the schedule included a review ofinsurance contracts.

The discussion focused on participating contracts and whethercontracts that offer the possibility of the contract holderparticipating in a dividend or some other sort of bonus should beconsidered a liability.

GNAIE's Mr. Barnert said that if liabilities are not reportedwith assets, there is no consistency and insurers could report ahuge gain at the issue of a contract.

Steve Broadie, vice president-financial legislation andregulation with the Property Casualty Insurers Association ofAmerica, Des Plaines, Ill., said that all insurers will be impactedby an IASB insurance contracts paper scheduled to be released inMarch.