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Insurers would take an immediate hit to recognize unfunded pension liabilities without the cushion of a deferred tax asset under new issue papers released for comment by the National Association of Insurance Com-missioners.
Issue Paper No. 8, Accounting for Pensions, calls for insurers to adopt for statutory purposes FASB's Statement No. 87, Accounting for Pensions with some modifications.
This proposal was released April 25 in the latest batch of issue papers from the Codification of Statutory Accounting Principles Working Group. In all, 11 issue papers were exposed for a 45-day comment period.
Under GAAP, companies that adopted FAS 87 were able to set up a deferred tax asset to help offset the pain of recognizing their pension liability, one insurance finance specialist noted.
Insurers...