Proposed changes in U.S. accounting standards aimed at bringing them in line with those used by European firms would "radically transform" the accounting methodology used by property and casualty and life insurers, according to an investment banking firm.

An investor's note from Sandler O'Neill & Partners, a specialist in financial firms, said the proposed new standard would also increase earnings volatility and "alter the relevance of historical valuation measures, such as book value and return-on-equity."

Sandler O'Neill officials said in the note that the "goal of these new standards is to increase transparency, while the exact result of these standards would be to significantly decrease transparency, in our view."

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