Research On The Implementation Effect Of China’s Insurance Contracts Accounting Reform In2009

In December,2009, the Ministry of Finance issued "Insurance Contracts Relevant Accounting Treatment Provisions", which mainly stipulated the insurance contracts splitting, significant insurance risk test and measurement of insurance contract reserve and other aspects. Thus, the differences of insurance contracts standards between China and IASB basically eliminated, and realized the separation of generally accepted accounting principles and regulatory accounting standards. The new standard’s release means that the insurance contracts standards of China is more committed to a true and fair view of the insurance companies’ financial position and operating results, and more committed to provide investors with decision-making related information. The officers of the Accounting Division of Ministry of Finance and the Financial and Accounting Department of the China Insurance Regulatory Commission said in response to reporter’s question that the new provisions promulgated in favor of the insurance industry to promote structural adjustment, enhance the core competitiveness of the insurance industry; help to reflect the insurance company’s financial condition and operation results more fairly, and enhance the transparency of the insurance contracts accounting information; help to separate accounting rules and regulatory requirements, to promote the upgrading of insurance accounting norms; help to eliminate the annual report differences of China’s insurance companies between A and H shares market, and to reduce the cost of outside financing; help to enhancing the status of our country’s insurance contracts standards, to enhance the international influence and voice. However, how does the new standard effect insurance companies, has the improvement of insurance contracts standard realized its targets, does it have significant effects on the insurance companies’ accounting information and operating behavior, the answers to these questions need to be answered through the analysis of the data of insurance companies.This paper made an empirical test on the changes of insurance companies’ financial data after the insurance contracts standards changed in2009, and found that insurance premium was significantly decreased, which was consistent with expected effect. This means the standard’s changes in2009improved insurance contracts’identification, the insurance premium’s confirmation was more reasonable and insurance company’s operation results were reflected more fairly. The insurance contract reserve decreased significantly, which was consistent with expected effect. This means the standard’s changes in2009helped driving the measurement of insurance liabilities from by actuarial assumptions to by accounting assumptions, promoted the separation of generally accepted accounting and regulatory accounting. However, contrary to our expectations, the standard’s changes in2009did not obviously help with the adjustment of insurance companies’ product structure. There still exist some problems about measurement assumption’s application and information disclosure in insurance companies.This paper consists of5parts.Part1:Introduction. This part mainly discusses the research background and significance, related literature on insurance contracts standards, the research method and content and the innovation and limitations.Part2:Overview of the development of insurance contracts standards. This part mainly introduced and reviewed the main content of the development process of international insurance contracts standards and the latest draft, and the development process of the insurance contracts standards of China and its improvement in2009.Part3:Theoretical analysis of the implementation effect of China’s insurance contracts accounting reform in2009and research hypothesis. This section describes the possible influences of the improvement of insurance contracts standards in2009, and according to the influences, put forward the main research hypothesis of this paper.Part4:Empirical design and analysis. Based on insurance companies’ financial data, this part examined our hypothesis by normative analysis and empirical test. Thus discovered some achievements and existing problems of insurance contracts standards’ improvement.Part5:Policy recommendations. This section summarizes the findings explained in this paper, and then put forward relevant policy recommendations.