SUMMARY OF BOARD DECISIONS

Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue an Accounting Standards Update.

March 15, 2010 FASB/IASB Joint Videoconference Board Meeting

Insurance contracts. The proposed measurement model for insurance contracts includes a residual margin, determined at inception as the difference between (1) the expected premiums and (2) the expected claims and expenses plus a risk adjustment. At this meeting, the Boards discussed how the insurer should subsequently release the residual margin to profit or loss.
The Boards tentatively decided that the insurer should release the residual margin over the coverage period in a systematic way that best reflects the exposure from providing insurance coverage, as follows:
  1. On the basis of passage of time; but
     
  2. If the insurer expects to incur benefits and claims in a pattern that differs significantly from passage of time, the residual margin should be released on the basis of the expected benefits and claims.
The Boards will discuss at a future meeting whether the residual margin should accrete interest.