New standards proposed by the Federal Accounting Standards Advisory Board (FASAB) are the result of an effort to provide concise, meaningful, and transparent information in federal government financial statements about insurance program costs and liabilities.
Three categories of insurance and related guidance would be established under the proposal:
- Exchange transaction insurance programs other than life insurance;
- Non-exchange transaction insurance programs; and
- Life insurance programs.
The proposal would rescind existing standards for insurance and guarantee programs in paragraphs 97–121 of Statement of Federal Financial Accounting Standards No. 5, Accounting for Liabilities of the Federal Government.
“The board is seeking to improve federal financial reporting and to better inform readers about the operating performance of insurance programs and the risk of loss to the federal government from adverse events,” FASAB Chairman Tom Allen said in a news release.
FASAB is seeking comments on the exposure draft by March 29. Comments can be emailed to fasab@fasab.gov.
—Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.
