{"product_id":"9781461370901","title":"The Fair Value of Insurance Business","description":"\u003ch1\u003eThe Fair Value of Insurance Business\u003c\/h1\u003e \u003ch2\u003eVanderhoof, Irwin T.; Altman, Edward I.\u003c\/h2\u003e \u003cp\u003eInsurance companies, as well as banks and thrift institutions,  have traditionally reported assets and liabilities on the basis of  their amortized cost, or book value. But following the turmoil in  securities markets due to highly volatile interest rate fluctuations  in the 1980s and the early 1990s, and problems caused by inadequate  liquidity, in the mid-1990s the Financial Accounting Standards Board  (FASB) issued a new ruling calling for financial intermediaries to  report the fair, or market, value of most assets. Called FAS 115, this  new standard is the first step in the eventual change to valuing all  the assets and liabilities belonging to financial intermediaries under  the fair value accounting method. Thus, these changes will pose  tremendous future implications for three key business measures of a  financial intermediary: \u003c\/p\u003e\u003cul\u003e \u003cli\u003e Solvency: if the fair  values of assets and liabilities are out-of-step, then healthy  companies may report negative net worth and insolvent companies may  appear to be in sound financial condition. \u003c\/li\u003e  \u003cli\u003e Reported Earnings:  if the fair values of assets and liabilities are out of step, then  reported earnings will not accurately represent the financial  operations of the company. \u003c\/li\u003e  \u003cli\u003e Risk Management: FASB recently  postponed the implementation of its new rules on accounting for the  use of derivatives instruments. However, if the final set of rules for  figuring the fair value of derivatives is not carefully crafted, it  may be possible that companies prudently hedging their risks are  subject to penalties in their financial reports, while companies  taking greater risks appear to have less volatile financial  performance. \u003c\/li\u003e  \u003c\/ul\u003e    Compared to banks and other financial  intermediaries, life insurance companies have the longest term and  most complex liabilities, and hence the new FASB requirement poses the  most severe challenges to the life insurance industry. The lessons  learned from the debate amonglife insurance academics and  professionals about how respond to the fair value reporting rule will  be instructive to their counterparts in other sectors of the insurance  industry, as well as those involved with other financial institutions.  Of particular note are the two papers which comprise Part III. The  first provides examples of the fair valuing of annuity contracts,  while the second offers examples of the fair valuing of term insurance  products. \u003cbr\u003e  As the papers collected in \u003cem\u003eThe Fair Value of Insurance Business\u003c\/em\u003e  extend and update some of the issues treated in a previous Salomon  Center conference volume, \u003cem\u003eThe Fair Value of Insurance  Liabilities\u003c\/em\u003e, this new volume may be viewed as a companion to the  earlier book. \u003ch3\u003eDetails\u003c\/h3\u003e \u003cp\u003ePublished by: Springer\u003c\/p\u003e \u003cp\u003ePublication Date: 2012-10-25\u003c\/p\u003e \u003cp\u003eFormat: Paperback\u003c\/p\u003e \u003cp\u003e ISBN-10: 9781461370901\u003c\/p\u003e \u003cp\u003eISBN-13: 9781461370901\u003c\/p\u003e \u003cp\u003eDOI: 10.1007\/978-1-4615-4623-8\u003c\/p\u003e \u003cp\u003eDimensions: 235cm x155cm\u003c\/p\u003e \u003cp\u003ePages: 322\u003c\/p\u003e ","brand":"Springer","offers":[{"title":"Default Title","offer_id":44359159971980,"sku":"9781461370901","price":153.0,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0710\/9545\/1788\/files\/9781461370901.jpg?v=1755103166","url":"https:\/\/lateknightbooks.com\/products\/9781461370901","provider":"Late Knight Books and Services, LLC","version":"1.0","type":"link"}