Discussion On The Problems Of The Measurement Of Life Insurance Contract’s Unearned Premium Reserve Under The New Accounting Standards In China

Due to the particularity of the life insurance business, insurance accounting has always been considered to be a heterogeneous accounting.Especially the part of estimate the reserve liabilities of life insurance contract, has been the problem of the insurance industry and the focus of many scholars.Before the new accounting standards, China has been to follow the Measurement system of legal reserve to measure the financial reserve. However, because of the legal reserve are more concerned about the level of the solvency of the insurer, the assumptions are relatively conservative which leading to the financial reserve measurement results lack of fairness requirements. Addition, due to the historical reasons, China’s insurance companies listed in Hong Kong follows the guidelines for U.S. GAAP financial measure to the contract reserve, this lack of comparability of financial information listed on the inside and outside the insurance company makes a certain extent. Therefore, in order to improve the fairness and comparability requirements of the insurance company financial information, insurance accounting reform in China is imperative.In recent years, The MOF P.R.China and the CIRC have put forward the new ideas and measurement requirements for the finicial reserve under the new accounting standards.Under the new accounting standards, the insurance contract liabilities are measured at the introduction of the spin-off of insurance contracts as well as significant insurance risk test.As the result,the part which does not belong to the part of insurance risk are recognized in accordance with the relevant financial instruments.and the insurance risk part are measured in accordance with the insurance contract which provision of the outstanding duty to reserve liabilities and the outstanding claims reserve liabilities.To be honest, the implementation of the new provisions,have made measurement results of finicial reserve more fair view of the insurance company’s financial information, and also make our insurance accounting practices to the international forefront. But from the annual report in recent years of China three listed life insurance companies,we can find that the disclosure of the finicial reserve is still ambiguity,which resulting the lack of comparability of information. The reason is mainly because the relevant provisions yet to be perfected, there is a manoeuvrable space to finicial reserve measurement assumptions and measurement methods. Therefore, this article attempts to departure from the principle of the relevant provisions of the guidance, combined with the current life insurance contract unearned reserve measurement practices, to analyze the life insurance contract unearned reserve measurement, and provide some suggestions and opinions.This article is divided into seven parts, the first part is the introduction which explaine the significance of this study, research, research methods, as well as innovation of this paper and the limitations of this study.The second part is the Research of the finicial reservemeasurement methods of lifeinsurance contrac.Including the foreign advanced measurement methods ofReview,finicial reserve measurement idea of life insurance under the new accounting standards.and the problems of reserve measurement under the new accounting standars.The third part is the measurement of the cost of cash flow. By drawing on the cost of processing practices and explore how to select the metering contract reserve reasonable costs of a hypothetical question, and analyze the reasonable when measure the reserve considering the cost of cash flow.The fourth part is the measurement of the embedded derivative financial instruments’ cash flow. Due to the complexity of the embedded derivative financial instruments, the current practice in this area of measurement is relatively backward.this article is analyse the minimum guaranteed interest option of the investment-linked insurance by B-S option pricing model.intend to analyse the embedded derivative financial instruments’ cash flow measurement method and seeks to simplify the approach.The fifth part is the discussion of discount rate.Discuss the limitation of using750-days Bond yield curve as the discount rate.And provide the new method of determine the discount rate by the asset portfolio theory through low-risk assets.The sixth part is the discussion for the margin. The article provide the necessity of measuring risk margins, and combined with the relevant requirements of international accounting standards on the provision of risk margin to make recommendations on the handling of the risk margin. About remaining marginal issues, this article explores the practice of the remaining marginal initial measurement methods, follow-up measurement methods, and proposed to improve views.The seventh part is the policy recommendations. Combined with the analysis of this article, provide some suggestions and opinions on China’s future life insurance contract reserve measurement.