IASB January 2008

The discussion paper Preliminary Views on Insurance Contracts proposed three building blocks for use in measuring insurance liabilities. One of those building blocks is a margin. Representatives of Ernst & Young briefed the Board on a recent report made by the firm at the request of the Group of North American Insurance Enterprises.

The report examined one approach to determining margins (the cost of capital method) in two contexts:

• general purpose financial reporting
• regulatory capital standards.

The session was educational and no decisions were made.

Next steps

The staff intend to present a high level summary of responses to the discussion paper at the Board’s meeting in February.