Finite-risk reinsurance is still a source of concern and uncertainty for the property-casualty industry. Although numerous companies have settled their investigations related to finite transactions and their accounting treatment since this issue first came under fire late in 2004, other inquiries are still pending.
More recently adding fuel to the fire was the Financial Accounting Standards Board's proposed “Bifurcation of Insurance and Reinsurance Contracts for Financial Reporting,” which was available for comment over the summer.
FASB was seeking input from buyers and sellers of insurance and reinsurance contracts, as well as from financial statement users, about the possible bifurcation of accounting for such contracts into “insurance” and “deposits” for financial reporting purposes.
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