FASB seeking comments on bifurcation of insurance, reinsurance contracts.

As part of a broader initiative to improve financial reporting for insurance accounting, the Financial Accounting Standards Board recently announced it is seeking constituent comment and perspective on the potential bifurcation of insurance and reinsurance contracts into insurance components and financing components. Comments are due Aug. 24 (visit www.fasb.org for the proposal).

The Invitation to Comment reflects the board's concern about a possible lack of transparency in the financial statements of both policyholders and (re)insurance companies relating to the depiction of insurance risk associated with contracts that include terms or features that significantly limit the actual amount of risk...