The AICPA’s Financial Reporting Executive Committee has released for public comment a
working draft that addresses the following issue associated with insurance entities’
implementation of FASB Accounting Standards Update No. 2018-12, Targeted
Improvements to the Accounting for Long-Duration Contracts:
“Ceded reinsurance — recognition of the reinsurance
recoverable and cost of reinsurance measurement and application of the 100%
net premium ratio cap and ‘floor’ (no negative liability) provisions
relating to the liability for future policy benefits on ceded reinsurance
transactions” (Issue #11AC).
Comments on the working draft are due by September 25, 2020.