LDTI and insurance accounting for long-duration contracts has been saved
Perspectives
LDTI and insurance accounting for long-duration contracts
Navigate an effective and efficient LDTI implementation journey
In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-12, often referred to as targeted improvements for long-duration contracts (LDTI). But ASU 2018-12 introduces new reporting complexities and will require more integration of finance and actuarial teams across processes and systems. Explore our perspectives and insights to help your organization better meet the standard and achieve its accounting goals.
An overview of the FASB’s ASU 2018-12
On June 10, 2020, the FASB voted to propose a deferral of one year for the effective date of ASU-2018 for all SEC filers to January 1, 2023, with an option to early adopt. The effective date for non-public insurers is also deferred one year to January 1, 2025.
The FASB considered that insurers could face pressure on the implementation timeline due to uncertainty of the prolonged nature and impact of COVID-19. The new effective date for SEC insurance filers adhering to US GAAP is now coincidentally aligned with the IFRS 17 effective date.
Actionable LDTI insights to help you prepare for ASU 2018-12
As insurers progress on their US GAAP Long-Duration Targeted Improvements implementation journey, they may face many challenges. Overcome these issues and prepare for the LDTI effective date by taking a deep dive into our perspectives, organized by topic.
A note about our guidance and perspectives
The publication of ASU 2018-12 defines new regulatory requirements for certain long-duration insurance products, otherwise known as the long-duration targeted improvements (LDTI). Despite being finalized, the new requirements are subject to continuous interpretation from the insurance industry and practitioners. Deloitte is closely involved in these discussions and shares its point of view (POV) to support the application of LDTI.
Please note that Deloitte POVs are written at a point in time and should not be interpreted as stand-alone guidance without taking into account ongoing industry views and evolving positions from both FASB and the Insurance Experts Panel. Until the industry is nearing the effective date on January 1, 2023, industry views and interpretations such as Deloitte POVs are subject to change.
Position your company to thrive in the future of insurance
If you’d like to learn more about ASU 2018-12, LDTI, and how our team can help your organization meet the new standards, let’s chat.
Get in touch
Matthew Clark
Principal | Human Capital | Deloitte Consulting LLP
Wallace Nuttycombe
US Advisory Principal | Deloitte & Touche LLP
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