| IASB is committed to building an applicable standard for accounting on the basis of the fair value to measure the framework of the system now. By the current international trend, The China Ministry of Finance issues 39 new accounting standards on Feb 15th,2006. Since Jan 1,2007, listed companies operate with encouraging other businesses. The insurance industry is the first of the new accounting profession. In order to better international convergence, The Ministry of Finance issues the "relevant accounting rules of insurance contract" in December 2009 and requires the insurer to estimate a reasonable amount as the basis of measurement by fulfilling obligations under insurance contracts clearly taking into account the marginal and time value of monetary. The great change of new accounting standards and new rules is the fair value, which includes the classifications of financial assets and the fair value of the measurement. Fair value is the only relevant measurement of the insurance contract, and the life insurance company is highly sensitive. This article is to explore the change in accounting after the instrument of fair value in life insurance industry and the relevant financial indicators.Chapter one is the preamble. It leads to the study, study purpose and significance standing on the view of international accounting and reviews the practice of fair value on the main methods and the financial impact the listed companies.Chapter two is about the application of fair value in the insurance. By introducing the environment of the fair value in our country and special significance, it has an analysis of the accounting and national insurance accounting process for our country from 2006 to 2010. Firstly, it clears the financial instruments of insurance contract, then analyses 06 new accounting standards for the measurement of life insurance company, and further explores the influence of the insurance contract of the relevant accounting regulations 2009. Chapter three is about fair value on life insurance companies in China. Through a new series of accounting standards and the accounting rules, you can see the measurement of the current life insurance in China. This chapter focuses on the use of life insurance company’s assets and liabilities of the fair value. And taking 2009’s China Life Insurance as an example, it analysis its implementation of accounting statement. At present, China’s life insurance accounting measurement is still for the fair value measurement of assets, liabilities in major part of the reserve account is still on the basis of estimate by the actuarial approach, and accounting measurement do not match.Chapter four is about the fair value of the financial impact on life insurance companies of China. Accounting data will cause the change and volatility in financial indicators. By principal component analysis of the establishment before 2005 about 26 life insurance companies reflecting the growth and profitability of financial indicators, we can get a comprehensive evaluation of the value of the formula. With the combined value of evaluation of each insurance company each year after the introduction of the fair, it can be seen whether significant impact for life insurance companies from the fair value measurement method of accounting by the single factor analysis of variance. In this chapter, the empirical test can be concluded that the introduction of fair value measurement model did not significantly impact on the insurance industry in China, which is to achieve a smooth transition into the fair value and large fluctuations does not appear.In brief, the author comes to the following conclusion. Firstly, because of the use of fair value, the profit statistics becomes more scientific and has effective way to reflect the market pricing of year’s profits, so it is more valuable for the buyers who purchase insurance policies. Secondly, quantitative empirical results show that the body of the financial situation of life insurance companies in China has not occurred drastic changes and statistically significant as expected after the introduction of fair value. Thirdly, since life insurance companies are financial companies, changes in fair value have a great impact on profits. But it not because of these changes in fair value of the operation itself, and it is on the impact of the macroeconomic environment and individual investment management. And significant changes in individual life insurance company of China do not affect the stability of the whole trend of financial indicators. We do not doubt the next new accounting standards, or question the introduction of fair value, but rather to explore ways to improve the use of fair value of the national conditions, and how to participate more actively in the framework of the International Accounting Standards custom by thinking about how to make China’s life insurance industry Accounting measurement involved in the development of international insurance accounting. |
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