NU Online News Service, Aug. 25, 3:45 p.m.EDT

A group that represents North American chief financial officersof insurers and reinsurers said the International AccountingStandards Board (IASB) has proposed an "excessively complex" modelregarding how certain short-term contracts are valued on insurers'balance sheets.

A draft of the Premium Allocation Approach circulated by theIASB failed in its attempt to establish a simplified model becausethe same rules cannot be applied to life and non-life companies,said the Group of North American Insurance Enterprises (GNAIE) inan Aug. 19 letter to the IASB.

With the new approach the IASB in essence wound up applying amodel to short-term property and casualty contracts that is notmeant for them, the GNAIE said.

"While it applies well to life insurance contracts, it does notresult in a relevant, reliable, comparable, transparent andunderstandable accounting for non-life insurance contracts," theGNAIE explained.

The group proposes another measurement for the short-termp&c contracts "based on the use of the existing robust, highlytransparent and understandable measurement approach in use fornearly a century," the letter states.