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Financial Statement Disclosure Report: The Needs and Practices Related to Financial Risk
There has been a range in practices among life insurance companies regarding the
type of financial statement information that is disclosed to the public and the
manner in which the information is presented. Such diversity of methods in the
industry creates challenges for reviewers of such statements in comprehending a
company's financial position and in comparing it to other companies. This
research, sponsored by the Society of Actuaries' Financial Reporting Section and
performed by an Ernst & Young research team led by Robert Frasca, examines the
financial statement disclosure practices of 25 major life insurance companies, the
extent to which these practices are standardized and the relative value to the
investment analyst community. It is hoped that life insurance companies and
financial reporting actuaries can use these results to better understand their own
company practices and the needs of the investment community as well as to identify
possible areas for improvement.
The opinions expressed and conclusions reached by the authors are
their own and do not represent any official position or opinion of the Society of
Actuaries or its members or Ernst & Young LLP. In addition, the discussion and
examples presented in this paper are for educational purposes. They are not to be
viewed as an authoritative statement by the Society of Actuaries or Ernst &
Young LLP on the quality and/or appropriateness of an individual company's
disclosure practices or an indicator of "better" practice from one company
relative to another.
Questions or comments on this report may be directed to Robert
Frasca at rob.frasca@ey.com or to Ronora
Stryker, SOA Research Actuary, at rstryker@soa.org.
- Darin Zimmerman, Chair
- John Brady
- David Campbell
- Errol Cramer
- Stephen Marco
- Carol Salomone
- Henry Siegel
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