The Fair Value of Insurance Liabilities

1. Front Matter

   Pages i-xviii

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2. Background on fair value accounting of insurance company assets and liabilities

   • Robert C. Wilkins

   Pages 1-6

3. Comparison of methods for fair-value life insurance liabilities

   • Arnold A. Dicke

   Pages 7-20

4. Fair valuation of life insurance company liabilities

   • Douglas C. Doll, C. Phil Elam, James E. Hohmann, Jacqueline M. Keating, Douglas S. Kolsrud, Karen Olsen MacDonald et al.

   Pages 21-126

5. Experience in implementing fair value of insurance liabilities

   • Dennis Carr, J. Peter Duran, Joseph E. Crowne

   Pages 127-142

6. Allowing for asset, liability and business risk in the valuation of a life company

   • Shyam Mehta, Phelim Boyle

   Pages 143-200

7. A market-value accounting framework for insurance companies

   • Mark W. Griffin, Joan Lamm-Tennant

   Pages 201-213

8. The value of the firm: the option adjusted value of distributable earnings

   • David N. Becker, Kim B. Staking

   Pages 215-295

9. The cash flow method for valuing liabilities in Canada

   • Allan Brender

   Pages 297-301

10. The derivation and application of accounting standards to the market value of liabilities

    • C. D. O’Brien

    Pages 303-330

11. The indexed discount rate method for fair valuation of liabilities

    • S. Michael McLaughlin

    Pages 331-349

12. Is Paul v. Virginia dead?

    • Krzysztof M. Ostaszewski

    Pages 351-360

13. Comments on ‘Earned profit method’, ‘Indexed discount rate method’ and ‘Is Paul vs. Virginia dead?’

    • Joan Lamm-Tennant

    Pages 361-362

14. Back Matter

    Pages 363-381

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This book explores theoretical and practical implications of reflecting the fair value of liabilities for insurance companies. In addition, the contributions discuss the disclosure of these values to the financial and regulatory communities and auditing firms which are actually calculating this illusive but important variable. It combines contributions by distinguished practitioners from the insurance, accounting and finance fields, with those of prominent academics. One of the central themes of the collection is that adequate disclosure of the true economic value of insurance company liabilities is both possible and desirable. Wherever possible, the insurance valuation process is wedded with modern financial theory. For example, the use of option pricing theory is applied to insurance companies, where the true value of the firm's liabilities is a critical variable. Methods such as cash flow, earned profit and indirect discount are explored.

• Finance
• accounting
• cash flow
• insurance
• option pricing
• pricing
• valuation

• Stern School of Business, New York University, USA

  Irwin T. Vanderhoof, Edward I. Altman

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