An Ernst & Young briefing notes that the FASB change in direction was "in response to feedback from constituents that any benefits applying the proposed guidance to all contracts that met a new definition of an insurance contract would not outweigh the cost of implementing it."

Moody's also says there had been some disagreement between the FASB and the IASB regarding certain aspects of their accounting proposals.

"We have been supportive of efforts to develop a single set of high-quality, globally applicable accounting standards for insurance contracts," Moody's says. "Inconsistency in accounting and reporting has long made it difficult to compare insurers with cross-border peers."

The ratings agency therefore says the decision to abandon convergence efforts "is negative for global investors because they will not benefit from improved comparability of financial statements of insurers reporting under U.S. GAAP and [International Financial Reporting Standards]."

The National Association of Mutual Insurance Companies called the FASB's decision a "major victory" for U.S. insurers. "For the past year, we have forcefully advocated against changes to GAAP accounting for insurance contracts that would deviate significantly from current statutory accounting reporting requirements," says Charles Chamness, president and CEO of NAMIC. "GAAP are universally recognized as the gold standard in the world of accounting, and we're obviously very pleased the FASB came to agree with us."

Phillip Carson, associate general counsel and director of financial regulatory policy for the American Insurance Association (AIA), says, "Rather than switching to a new model that our members believe would have been unsuitable for property and casualty contracts and that would be costly to implement without an offsetting benefit, the FASB has today indicated a desire to only make improvements to the disclosures associated with the financial statements of insurance products."

In October, in a conference call on Ace Group's Q3 results, Chairman and CEO Evan Greenberg said of the FASB's previous effort to seek convergence with the IASB, "[W]hen I look at the changes that FASB is suggesting right now, I get the theoretical, but that is divorced from practical reality and what investors really use to judge, and what management really uses to judge, one company to another or the health of a company."

He added, "The insurance accounting as it stands today has been around a long time, and it's been tested through all types of environments, and it's reasonable. And I don't know what kind of problem we're trying to chase here by making changes."