Canadian L’Institut
Institute canadien
of des
Actuaries actuaires
2008 Annual Meeting ● Assemblée annuelle 2008
Québec
IP-34 International GAAP,
2011 is closer than you think
June 19, 2008
Micheline Dionne
ASB and PC Update
Agenda
Assemblée annuelle 2008
2008 Annual Meeting
• Actuarial Standards Board
– IFRS Working Group
– Process
– Timeline
• Practice Council
ASB Update
• ASB Working Group Mandate
Ensure that appropriate standards for actuarial
Assemblée annuelle 2008
–
2008 Annual Meeting
work exist (or are developped or modified) that
are in harmony with IFRS/IAS, in all areas where
the latter is applicable
More specifically:
– Responsible for steering the ASB process
– Coordinate efforts with PC to insure proper
guidance
– Focus on Phase 1
– Organized into 4 working groups (Life, P&C,
Pensions, Regulatory liaison)
ASB Update
• ASB Subgroups responsibilities
– Liaise with CIA committees in their respective
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domain
2008 Annual Meeting
– Identify the need for new or modified standards
– Identify or propose creation of appropriate
designated groups for the drafting
– Promote parallel development of standards and
guidance, whenever applicable
– Add non-ASB members to their roster when
needed, most likely after the summer
– Track revisions of existing or exposure of new
IFRS/IAS standards
– Communicate with membership
ASB Update
• ASB Working Group
Assemblée annuelle 2008
– Nick Bauer, Chairperson
2008 Annual Meeting
– Mark Cambell (Pensions)
– Micheline Dionne (Life)
– Richard Gauthier (Property & Casualty)
– Charles McLeod (Chair of ASB)
– Jacques Tremblay (Chair of PC)
ASB Update
• Timing
Assemblée annuelle 2008
– All Notices of Intent by March 2009
2008 Annual Meeting
– All Exposure Drafts by June 2009 – to
allow discussion at the Annual CIA
meeting
– Final standards and guidance by late fall
2009 (November 1st ?)
ASB Update
• Action taken to date
Met with AMF on May 23rd to solicit their
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2008 Annual Meeting
views and expectations
– Conference call with OSFI insurance
actuaries on May 27th
– Started planning a regular process of
communication to the membership
• First memo for June 2008
– Review of existing standards to
tentatively identify standards requiring
changes – target date: end of July 2008
ASB Update
• Global review of the standards
– General Standards
Assemblée annuelle 2008
– Insurance (Life and P&C)
2008 Annual Meeting
• Insurance Contracts
• Financial Instruments
• Service Contracts
– Pensions and other employee benefits
– Public Personal Injury Compensation Plans
(PPICPs)
• could be greatly impacted
• doubt exists as to whether they will be subject to IFRS
– Accounting Standards Board has determined that IFRS
will apply to “publicly accountable” companies
– OSFI and AMF have extended its application to all
insurance companies (whether publicly accountable or
not) under their jurisdiction
ASB Update
• Rules vs. No Rule
No rule argument
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2008 Annual Meeting
• In line with banks for Investment products
• More in line with other countries – why disadvantage
ourselves
• AcSB could say that elimination of options is contrary
to International GAAP spirit
• Disclosure will induce convergence anyway
– Rule argument
• Reduction of the range of practice
• Lower the risk of non-intended mis-behavior
• Our current SOP and guidance has made the
Canadian reputation of professionalism
ASB Update
Preliminary Toughts
• Definitions of Insurance vs. Investment vs.
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Service Contracts
2008 Annual Meeting
– Already lots of examples and guidance in IFRS
and IAS litterature – do we need more, do we
need to regroup them ?
• How to value Investment Contracts
– Definition of Fair Value
– Insurance = CALM (Ins. + Inv) – FV (Inv.) ?
Probably not, as contrary to IFRS spirit
• Reinsurance
– Not a negative liability anymore but an asset –
How would CALM work?
ASB Update
Preliminary Toughts
• Is CALM = Adequacy testing? Do we need a
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statement to that effect ?
2008 Annual Meeting
• Is the P&C approach equivalent to
adequacy testing ?
• Discounted tax provision – not acceptable
under IFRS but part of CALM
• Standards on Disclosure – needed soon!
• Definition of Embedded derivatives
• Clarification of „accepted actuarial practice‟
• Review of the Joint Policy Statement
ASB Update
• Suggested reading
Assemblée annuelle 2008
– First time adoption and implementation :
2008 Annual Meeting
IFRS 1
– Insurance Contracts: IFRS 4
– Service Contracts: IAS 18
– Investment Contracts: IAS 39
PC Update (June 4th message
on Phase 1)
• 2011 timetable is tight
Assemblée annuelle 2008
• Coordination is key
2008 Annual Meeting
– CIA (ASB, PC, Practice committees)
– CICA
– Regulatory (OSFI, AMF, …)
• Phase 1
– Local statutory and regulatory requirements
continue to apply
– Need to confirm limited changes to Ed. Notes,
Research Papers and Regulatory Capital
Formula Related Guidelines
– Need to insure all required work is assigned to
the appropriate group
PC Update (June 4th message
on Phase 1)
• Phase 1
Assemblée annuelle 2008
Progress to completion in timely fashion –
2008 Annual Meeting
–
useful, reliable, timely guidance
– Review membership of CIA Committees,
possible establishment of Task Force
– Identify practice specific Standards
requiring modifications + Ed. Notes
– Identify committees needing additional
ressources
– Educate members – special seminar
PC Update (June 4th message
on Phase 1)
• Phase 1 - Potential guidance
Assemblée annuelle 2008
2008 Annual Meeting
– Disclosure for YE08 (Qualitative) and
YE09 (quantitative)
– Treatment of reinsurance (IFRS 4)
– Triage of contracts – Is this a CIA or a
CICA matter ?
– AA role for capital certification – DCAT
Least possible changes in comment
guidance