FASB Further Delays Accounting Rule on Insurance Contracts

Insurance companies are getting even more time to implement a new rule for valuing long-term contracts following a vote by the Financial Accounting Standards Board on Wednesday.

The rule maker, which sets accounting standards for companies and nonprofits in the U.S., in June proposed a delay of another year for the new rule amid the economic harm caused by the coronavirus pandemic. The rule was first delayed by a year last November to give companies more time to modernize their processes for reporting and valuation.

Insurance firms must review assumptions used to measure the value of their long-term contractual obligations and make revisions if needed. Long-term contracts include agreements on annuities, endowments and title insurance. Short-duration contracts usually cover property and liability protection.

Publicly listed insurers, excluding small ones, may

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