Funded covers under siege; before property catastrophe funded reinsurance is rendered functionally useless, regulators and the accounting profession need to acknowledge that funded products buttress an industry under stress

Article Abstract:

Catastrophe reinsurance has suffered because of Hurricane Andrew. Prices have increased and capacity has diminished due to the issue of accrual accounting. The Financial Accounting Standards Board and its Emerging Issues Task Force have reached a tentative agreement for the standards of funded covers. The new standard will eliminate the principal benefit of the stabilization of net underwriting results and allow funded reinsurance products to be termed 'financial reinsurance.'

Reinsurance, Reinsurance Carriers, Accrual Accounting, Standards, Accounting and auditing, Financial Accounting Standards Board, Accrual basis accounting, Disasters

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Buenos Aires

Article Abstract:

Argentina's economy regained the public's confidence in 1991, through the government's economic program, privatization, deregulation and the virtual disappearance of inflation. However, the insurance industry had problems, the largest of which was the financial situation of INdeR, the state reinsurance company. INdeR will have to be liquidated and premium taxes used to pay its $1.1 billion runoff.

Finance, Argentina, INdeR

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