The International Accounting Standards Board (IASB) has today launched a public consultation on accounting for insurance contracts by publishing its preliminary views in a discussion paper.

This is the latest stage of a consultation which began in 2004 when the IASB set up the Insurance Working Group.

The public consultation will last for six months and will aid the IASB in developing proposals for an exposure draft to be published towards the end of 2008. The IASB expects the new standard to be in place in 2010.

Commenting on today's announcement, Warren McGregor, IASB member, said: “For many years, users of insurers' financial statements have complained that insurance accounting is a ‘black box' and insurance accounting standards varied widely by country. The disclosure requirements in our existing standard, IFRS 4 Insurance Contracts, shone some light into this area of accounting, but IFRS 4 is only an interim standard and permits a wide variety of accounting practices for insurance contracts. Many of these practices make it difficult to understand insurers' financial statements and differ from those used in other sectors. This discussion paper presents our initial thoughts on how to finish the job we started with IFRS 4 and we now invite broad public consultation on the preliminary conclusions we have reached.”