PRE » Topics » Recent Accounting Pronouncements

These excerpts taken from the PRE 10-K filed Feb 27, 2009.

(u) Recent Accounting Pronouncements

FSP SFAS 157-2

In February 2008, the FASB issued FSP SFAS 157-2, “Effective Date of FASB Statement No. 157” (FSP SFAS 157-2), which permits a one-year deferral of the application of SFAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company will adopt FSP SFAS 157-2 for non-financial assets and non-financial liabilities on January 1, 2009 and is currently evaluating the impact of this adoption on its consolidated shareholders’ equity and net income.

SFAS 160

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (SFAS 160). SFAS 160 amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (ARB 51) to establish accounting and reporting standards for a noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB Statement No. 141 (revised 2007), “Business Combinations”.

SFAS 160 will be effective for fiscal years beginning after December 15, 2008, and the Company will adopt SFAS 160 as of January 1, 2009. SFAS 160 may not be applied retroactively and early adoption is prohibited. The Company is currently evaluating the impact of the adoption of SFAS 160 on its consolidated shareholders’ equity and net income.

SFAS 163

In May 2008, the FASB issued Statement No. 163, “Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60” (SFAS 163). SFAS 163 clarifies the recognition and measurement of premium revenue and claim liabilities, and requires expanded disclosures about an entity’s financial guarantee insurance contracts. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company has determined that the impact of the adoption of SFAS 163 on its consolidated shareholders’ equity and net income is immaterial and no additional disclosures are required at December 31, 2008.

EITF 07-05

In June 2008, the FASB’s Emerging Issues Task Force reached a consensus regarding EITF Issue No. 07-5, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (EITF 07-5). EITF 07-5 outlines a two-step approach to evaluate the instrument’s contingent exercise provisions, if any, and to

 

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evaluate the instrument’s settlement provisions when determining whether an equity-linked financial instrument (or embedded feature) is indexed to an entity’s own stock. EITF 07-5 is effective for fiscal years beginning after December 15, 2008 and must be applied to outstanding instruments as of the beginning of the fiscal year of adoption as a cumulative-effect adjustment to the opening balance of retained earnings. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of EITF 07-5.

(u) Recent Accounting Pronouncements

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">FSP SFAS 157-2

In February 2008, the
FASB issued FSP SFAS 157-2, “Effective Date of FASB Statement No. 157” (FSP SFAS 157-2), which permits a one-year deferral of the application of SFAS 157 for all non-financial assets and non-financial liabilities, except those that
are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company will adopt FSP SFAS 157-2 for non-financial assets and non-financial liabilities on January 1, 2009 and is currently evaluating the impact
of this adoption on its consolidated shareholders’ equity and net income.

SFAS 160

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB
No. 51” (SFAS 160). SFAS 160 amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (ARB 51) to establish accounting and reporting standards for a noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB Statement No. 141 (revised 2007), “Business Combinations”.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">SFAS 160 will be effective for fiscal years beginning after December 15, 2008, and the Company will adopt SFAS 160 as of January 1, 2009. SFAS
160 may not be applied retroactively and early adoption is prohibited. The Company is currently evaluating the impact of the adoption of SFAS 160 on its consolidated shareholders’ equity and net income.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">SFAS 163

In May 2008, the FASB
issued Statement No. 163, “Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60” (SFAS 163). SFAS 163 clarifies the recognition and measurement of premium revenue and
claim liabilities, and requires expanded disclosures about an entity’s financial guarantee insurance contracts. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company has
determined that the impact of the adoption of SFAS 163 on its consolidated shareholders’ equity and net income is immaterial and no additional disclosures are required at December 31, 2008.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">EITF 07-05

In June 2008, the
FASB’s Emerging Issues Task Force reached a consensus regarding EITF Issue No. 07-5, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (EITF 07-5). EITF 07-5 outlines a two-step
approach to evaluate the instrument’s contingent exercise provisions, if any, and to

 


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FACE="Times New Roman" SIZE="2">Notes to Consolidated Financial Statements—(Continued)

 



evaluate the instrument’s settlement provisions when determining whether an equity-linked financial instrument (or embedded feature) is indexed to an
entity’s own stock. EITF 07-5 is effective for fiscal years beginning after December 15, 2008 and must be applied to outstanding instruments as of the beginning of the fiscal year of adoption as a cumulative-effect adjustment to the
opening balance of retained earnings. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of EITF 07-5.

These excerpts taken from the PRE 10-K filed Feb 29, 2008.

(u) Recent Accounting Pronouncements

SFAS 157

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (SFAS 157). This statement defines fair value, establishes a framework for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 provides guidance on how to measure fair value when required under existing accounting standards and requires disclosure of the fair value of financial instruments according to a fair value hierarchy that prioritizes the information used to measure fair value into three broad levels. Quantitative and qualitative disclosures will focus on the inputs used to measure fair value for such fair value measurements and the effects of the measurements on the financial statements.

SFAS 157 will be effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS 157 as of January 1, 2008. The adoption of SFAS 157 is not expected to have a material impact on the Company’s consolidated shareholders’ equity or net income.

SFAS 159

In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115” (SFAS 159). SFAS 159 allows entities to choose, at specified election dates, to measure eligible financial assets and financial liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item’s fair value in subsequent reporting periods must be recognized in current earnings. SFAS 159 also establishes presentation and disclosure requirements designed to draw comparisons between entities that elect different measurement attributes for similar assets and liabilities.

SFAS 159 will be effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS 159 as of January 1, 2008. The Company will elect the fair value option for the following financial assets:

 

   

Fixed maturities;

 

   

Short-term investments;

 

   

Equities; and

 

   

Other invested assets (excluding investments accounted for by the equity method or investment company accounting).

On adoption of SFAS 159, the Company expects to record a cumulative effect adjustment of approximately $97.2 million, net of taxes, which will decrease accumulated other comprehensive income and increase opening retained earnings as of January 1, 2008. The Company expects the adoption of SFAS 159 to add more volatility to net realized investment gains and losses in its Consolidated Statement of Operations, but the adoption will have no impact on its shareholders’ equity in its Consolidated Balance Sheet nor its comprehensive income.

SFAS 160

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (SFAS 160). SFAS 160 amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (ARB 51) to establish accounting and reporting standards for a noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB Statement No. 141 (revised 2007), “Business Combinations”.

 

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SFAS 160 will be effective for fiscal years beginning after December 15, 2008, and the Company will adopt SFAS 160 as of January 1, 2009. SFAS 160 may not be applied retroactively and early adoption is prohibited. The Company is currently evaluating the impact of the adoption of SFAS 160 on its consolidated shareholders’ equity and net income.

(u) Recent Accounting Pronouncements

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">SFAS 157

In September 2006, the FASB
issued Statement No. 157, “Fair Value Measurements” (SFAS 157). This statement defines fair value, establishes a framework for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 provides guidance
on how to measure fair value when required under existing accounting standards and requires disclosure of the fair value of financial instruments according to a fair value hierarchy that prioritizes the information used to measure fair value into
three broad levels. Quantitative and qualitative disclosures will focus on the inputs used to measure fair value for such fair value measurements and the effects of the measurements on the financial statements.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">SFAS 157 will be effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS 157 as of January 1, 2008. The
adoption of SFAS 157 is not expected to have a material impact on the Company’s consolidated shareholders’ equity or net income.

SIZE="2">SFAS 159

In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities—Including an amendment of FASB Statement No. 115” (SFAS 159). SFAS 159 allows entities to choose, at specified election dates, to measure eligible financial assets and financial liabilities at fair value that are
not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item’s fair value in subsequent reporting periods must be recognized in current earnings. SFAS 159 also
establishes presentation and disclosure requirements designed to draw comparisons between entities that elect different measurement attributes for similar assets and liabilities.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">SFAS 159 will be effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS 159 as of January 1, 2008. The
Company will elect the fair value option for the following financial assets:

 







  

Fixed maturities;

 







  

Short-term investments;

 







  

Equities; and

 







  

Other invested assets (excluding investments accounted for by the equity method or investment company accounting).

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">On adoption of SFAS 159, the Company expects to record a cumulative effect adjustment of approximately $97.2 million, net of taxes, which will decrease
accumulated other comprehensive income and increase opening retained earnings as of January 1, 2008. The Company expects the adoption of SFAS 159 to add more volatility to net realized investment gains and losses in its Consolidated Statement
of Operations, but the adoption will have no impact on its shareholders’ equity in its Consolidated Balance Sheet nor its comprehensive income.

FACE="Times New Roman" SIZE="2">SFAS 160

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51” (SFAS 160). SFAS 160 amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (ARB 51) to establish accounting and reporting standards
for a noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB Statement No. 141 (revised 2007),
“Business Combinations”.

 


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FACE="Times New Roman" SIZE="2">Notes to Consolidated Financial Statements—(Continued)

 


SFAS 160 will be effective for fiscal years beginning after December 15, 2008, and the Company
will adopt SFAS 160 as of January 1, 2009. SFAS 160 may not be applied retroactively and early adoption is prohibited. The Company is currently evaluating the impact of the adoption of SFAS 160 on its consolidated shareholders’ equity and
net income.

This excerpt taken from the PRE 10-Q filed Nov 7, 2007.

Recent Accounting Pronouncements

See Note 3 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This excerpt taken from the PRE 10-Q filed Aug 9, 2007.

Recent Accounting Pronouncements

See Note 3 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q.

 

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This excerpt taken from the PRE 10-K filed Mar 1, 2007.

(t) Recent Accounting Pronouncements

FIN 48

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (FIN 48). The interpretation requires companies to recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The amount recognized is the amount that represents the largest amount of tax benefit for those items with a greater than 50% likelihood of being ultimately realized. A liability must be recognized for any tax benefit (along with any interest and penalty, if applicable) claimed in a tax return in excess of the amount allowed under the interpretation. FIN 48 requires a tabular reconciliation of the change in the aggregate unrecognized tax benefits claimed in tax returns and requires disclosure for those uncertain tax positions where it is reasonably possible that the estimate of the tax benefit will change significantly in the next 12 months. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company will adopt FIN 48 as of January 1, 2007. The adoption of FIN 48 is expected to reduce the Company’s consolidated shareholders’ equity by approximately $5 million to $10 million, with no material impact on net income.

SFAS 155

In February 2006, the FASB issued Statement No. 155 “Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140” (SFAS 155). This Statement amends SFAS

 

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133 and SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (SFAS 140). This Statement resolves issues addressed in SFAS 133 DIG Issue No. D1 “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets”. It permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation; clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and amends SFAS 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.

In January 2007, the FASB finalized SFAS 133 DIG Issue No. B40 “Embedded Derivatives: Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets” (Issue B40). Issue B40 determined criteria to evaluate whether a securitized interest in prepayable financial assets would not be subject to the bifurcation conditions in paragraph 13(b) of SFAS 133, thereby modifying the way beneficial interests in securitized financial assets are evaluated under SFAS 155.

SFAS 155 is effective for fiscal years that begin after September 15, 2006. The Company will adopt SFAS 155 as of January 1, 2007. Issue B40 is effective for all securitized interests in prepayable financial assets acquired by the Company after the adoption of SFAS 155. The adoption of SFAS 155 and Issue B40 are not expected to have a significant impact on the consolidated shareholders’ equity or net income of the Company.

SFAS 157

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (SFAS 157). This statement defines fair value, establishes a framework for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 provides guidance on how to measure fair value when required under existing accounting standards. The statement requires disclosure of the fair value of financial instruments according to a fair value hierarchy that prioritizes the information used to measure fair value into three broad levels. Quantitative and qualitative disclosures will focus on the inputs used to measure fair value for both recurring and non-recurring fair value measurements and the effects of the measurements on the financial statements.

SFAS 157 will be effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of SFAS 157 on its consolidated shareholders’ equity or net income.

SFAS 159

In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item’s fair value in subsequent reporting periods must be recognized in current earnings. SFAS 159 also establishes presentation and disclosure requirements designed to draw comparisons between entities that elect different measurement attributes for similar assets and liabilities.

SFAS 159 will be effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of SFAS 159 on its consolidated shareholders’ equity or net income.

 

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This excerpt taken from the PRE 10-Q filed Nov 9, 2006.

Recent Accounting Pronouncements

See Note 6 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of this document.

This excerpt taken from the PRE 10-Q filed Aug 9, 2006.

Recent Accounting Pronouncements

See Note 6 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of this document.

 

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This excerpt taken from the PRE 10-Q filed May 9, 2006.

Recent Accounting Pronouncements

See Note 6 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of this document.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This excerpt taken from the PRE 10-Q filed Nov 9, 2005.

Recent Accounting Pronouncements

 

See Note 8 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of this document.

 

This excerpt taken from the PRE 10-Q filed Aug 9, 2005.

Recent Accounting Pronouncements

 

See Note 5 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of this document.

 

This excerpt taken from the PRE 10-Q filed May 9, 2005.

Recent Accounting Pronouncements

 

See Note 5 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of this document.

 

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