| With growing integration and linkage of markets, cooperation between countries and industries is a natural prerequisite of international streamlined processes. To this end, my country actively joined in the wave of international convergence of accounting standards, continuous improvement and optimization of Chinese accounting standards. In the process of to promote the convergence of Chinese accounting standards and international accounting standards, due to the characteristics of the insurance industry itself, making insurance became a major obstacle to international convergence of accounting. As of 2008,57 A+H shares of listed company net profit difference is 13.026 billion yuan, but disregarding the two insurance companies -China Life Insurance and Ping An Insurance (Group) Company of China, Ltd., net profit difference directly down to 2.356 billion yuan, between the inside and outside financial statements is mainly difference reflected in the following three areas:premium revenue recognition diameter, policy acquisition cost method and principle of insurance reserves made. Thus, to facilitate international convergence of accounting standards, on the reform of accounting standards for insurance must be strengthened.The first part describes Unbundling of Insurance Contracts and Risk Significant Test, and analyze the impact of changes on life insurance companies. This article consider that different from the traditional life insurance products, new types of life insurance products contain both an insurance component and a so-called deposit component. There is a fundamental difference between insurance component and deposit component, how the process of unbundling shall be carried out is very important. New policies of insurance accounting in Unbundling of Insurance Contracts and Risk Significant Test, the most intuitive is the effect of changes in the scale of premiums, so as to affect the market share of life insurance companies. Then, proceeding from the problems of China’s life insurance industry structure to analyze the changes in the premiums recognition and measurement and the impact of product structure of the company. In response to the effect of accounting changes, life insurance companies should take positive and effective measures, understanding the nature of life insurance structural adjustment deeply, continue to adjust the product and the business structure; increased the embedded value of life insurance business, strengthening the capacity for the sustainable development of the company.The second part, introducing new policies of insurance accounting changes II: policy acquisition costs and its impact on life insurance companies.This section describes the two accounting modes of acquisition costs: capitalization and expense, and then describes international accounting standards use the method of dealing with insurance. Acquisition costs caused "new business losses" or "earnings loss", which is why many scholars oppose to acquisition costs as an expense. Next there is a brief analysis on the causes of "earnings loss" and introduced the solution ways to eliminate " earnings losses" by amended-by-year regular Amendment Act and by Zillmer, their essence is by reducing the provisioning in early years to compensate for higher acquisition costs. By analyzing life insurance companies’profits, this paper think fee loss is the main reason for the loss of life insurance companies. Because of acquisition costs such as fees and commissions in the first-year policy acquisition costs accounted for a large part, it must have an impact on life insurance companies. Combined with the situation of three life insurance companies, analysis of the status of the fee and Commission expenses. This article consider to eliminate adverse effects of recognise acquisition costs as an expense, life insurance companies should fundamentally solve the problem:strengthening the policy of maintaining, maintaining stable renewal rate, reducing the surrender rate; To arrangement the first-year underwriting costs scientific and rational, mainly is the amount of fees and Commission expenses.The third part is the focus of this article, analysis of new policies of insurance accounting change III:principles based on the best estimates of reserves and its impact on life insurance companies.The measuring treatment of life insurance reserves in China is consistent with the IASB, based on the present value of the fulfilment cash flows and a residual margin. Residual margin could be viewed as an compensation for the cost and effort of originating the contracts and assembling them into the portfolio. The new principle of life insurance reserves requires the evaluation interest is not locked, but rather to the balance sheet date to obtain current information as a basis for assuming. Evaluation basis of life insurance reserves directly determine the extracting coverage of reserves, which affects company’s expected profit and cash flow. Evaluation interest’s influence on reserves amount is very significant, and thus affecting the profit distribution of company. In addition, under the principle of the best estimate of reserves also affect the value of life insurance company, different distributions of profit on the point in time, makes the present value of profits changes, thus affecting the embedded value of life insurance company.Life insurance companies should continuously strengthen the coordinated operation of the insurance accounting and actuarial. In addition, Life insurance companies should strengthen communication and liaison on different departments within the company and between the company and the external environment. Reserves’evaluation basis change, makes life insurance company’s profits release ahead, which require the company to strengthen the management of profits, reasonable and efficient use of the profits, make a plan which sustained and healthy development of the life insurance company to use profits. In addition, under the principle of the best estimate of reserves involves many assessment assumptions, the marketization of evaluation interest have also increased risks faced by life insurance companies. Life insurance companies must fully understand the company’s interest rate risk, investment risk and credit risk, fully aware of the risks of self-price.Part IV analyze the effects and requirements of new insurance accounting on regulatory. Insurance regulators, as policy makers, should actively to draft international insurance accounting standards, further promoting international convergence, create a favourable international environment for Chinese insurance industry. In addition, there are more correct regulatory guidance, continue to monitor the life insurance industry structure adjustment; promote separation of insurance accounting rules and regulations, safeguarding the interests of investors and protecting the interests of policy holders; increased regulators’professional knowledge, applying accounting standard for insurance better, developing new policies of insurance accounting more operational. This paper combined with international insurance accounting standards closedly, analysis of the new policies of insurance accounting changes in three points, at the same time by collecting Three Listed Life Insurance Companies’ financial data—China Life Insurance, Ltd.、Ping An Insurance (Group) Company of China, Ltd. and China Pacific Insurance (Group) Co., Ltd. (CPIC) to analyze the affects of life insurance company. By combining theory and practice, continuously optimize our contry’s insurance accounting, to provide a basis for accounting standard for the supervisory authorities. |
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