The International Financial Reporting Standard for insurance contracts and US GAAP long-duration contract targeted improvements both require a current estimate of insurance liabilities instead of following a traditional net level premium reserve approach using assumptions locked in at policy issue. However, the source of period-by-period profit, and the resulting profit signatures due to experience or assumption changes, could differ significantly between the two. This briefing note illustrates these potential differences using a traditional level premium endowment contract.
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IFRS 17 vs. US GAAP LDTI: Different animals?
This briefing note illustrates potential differences between the International Financial Reporting Standard for insurance contracts and US GAAP long-duration contract targeted improvements using a traditional level premium endowment contract.