Accounting Rules Could Scare Some Life Insurers Private: S&P
November 6, 2019 by Allison Bell
The new long-duration insurance contract accounting rules could make some U.S. life insurers’ results go up and down so much that the insurers will have to give up having publicly traded stock.
Peggy Poon and other analysts at S&P Global Ratings suggest that possibiity in an analysis of the possible impact of the Financial Accounting Standards Board’s Accounting Standards Update 2018-12.
ASU 2018-12 may not have a big effect on U.S. life insurers immediately.
Eventually, however, the new standards “could drive many insurers to shift their strategies,” the S&P analysts write.
“We believe the primary impact of the new standards will be changes to strategy, reporting, or ownership structure as insurers, particularly those that are publicly held, try to educate their investors and constituents.”