A Study Of The Problems About The Insurance Accounting In The New Accounting Standards

The new accounting standards have been published and implemented since 2007, in order to consistent with the international financial reporting standards which is followed by Hong Kong stocks. But, we can still find the differences between the A-shares and the H-shares from the financial data of 2008.Most of the differences belong to the insurance companies. It means that if we want the new accounting standards to consistent to the international financial reporting standards in the next step, we should pay our attention to reform the insurance accounting.So,in the end of 2009,the policies of the insurance contract accounting(we call it the new policies in the following part) was published by our ministry of finance. The report prove that there are some good effects by the new policies.It help the insurance accounting to be the same with the international financial reporting standards.Otherwise,the new policies also has some shortcomings,we will raise some suggest for the shortcomings in the report.The report includes the following six parts:Chapter1:Introduction. Introduce the background, the meanings and the paper structures of the paper, which make the detail plans for the writing.Chapter2:Literature review. Introduce the literatures which are related to the paper issue. This part supplies the theories to the paper. There are several aspects as follows:1. The features of the new accounting standards2. The differences of the insurance accounting between the new accounting and the international financial reporting standards3. The aspects and shortcomings of the new policiesChapter3:Theoretical analysis. It includes two parts:the features and shortcomings of the new accounting standards. The part of the features is introduced simply. It involves that the new accounting standards take the contract involving insurance risk as the supervised object. Besides, the new accounting standards demand us to do the reserve adequacy test, etc. This part focuses on the differences of the two accounting standards. The paper proposes that this is an important reason which makes the financial data of A-shares and H-shares different. The difference has three parts:1. When the insurance contract is confirmed and estimated, the new accounting standards did not enforce insurers to divide the mixed insurance contract and did not request the significant insurance risk test.2. The cost of the insurance policy is confirmed as cost.3. The policy of the insurance contract reserve is too cautious.Chapter 4:Theoretical analysis. The chapter is an important part of the paper. The part will be divided into two aspects:the traits and the shortcomings of the new policies by analyzing the contents of the new policies. The traits are as follows:1. Force the insurers to divide the mixed insurance contract.2. Lead the significant insurance risk test into confirming the insurance contract.3. The policy of the insurance contract reserve is more flexible than the before one.In contrast with the features, the weak points are the following ones:1. The cost of the policy is still dealt as cost, which is the difference with the international financial reporting standards.2. The best-estimated policy is not convenient to regular.Chapter5:Case study. The paper takes the pingan insurance company as the case to prove the effect of the new policy. The main method is to contrast the effect by carrying out the new policy or not. The data are based on the financial report from 2007 to 2009.We can see the effects of the new policies from the financial data which are net profit and assets. But, we prove that the new policies still have problems which are mentioned in Chapter 4. The methods to deal the cost of policy are different in different stock market.Chapter 6:The suggestions to the new policies. According to the chapter 4, the writer gives some advice to complete the new policy. The detail suggestions are mentioned in the following part:1. The regulators should make sure the conception of the income of the premium and the scale-income of the premium. The conception of scale-income should be not used in the annual financial reporting.2. The cost of the insurance policy should be divided to each period according to the revenue.3. The department of the insurance regulation should strengthen the best-estimated policy. On one hand, we should enforce the policy to be detail. On the other hand, the policy must be not used to control the benefit.The main contributions of the paper are as follows:The new policies is still in the step of making details better because it was published at the end of 2009. The paper use the writing method of case study to prove the effect and the problems of it, which is not popular used before. The study gives some suggestions to complete the new policies.Of course, because the new policies is published at the end of 2009,there are still several faults of the paper:1. The data is not enough to analyze. The object of the case study should be an insurance company which is listed in the A-shares and H-shares. It enforce us to select the aim from a few companies. All of the data are published just in the recent three years, from 2007 to 2009.2. The suggestions in the last part still need to be perfect. All of the suggestions are analyzed from the theoretical point, which are not tested by the insurance firms. Only if the test has been done in the actual conditions, the suggestions are proved right to publish.