Sunday, May 25, 2008

U.S. FASB issues new insurance accounting rule

NEW YORK, May 23 (Reuters) - The Financial Accounting Standards Board, which sets U.S. bookkeeping rules, issued a new rule on Friday to help standardize the way insurance companies account for financial guarantee insurance contracts.

Financial guarantee insurance provides protection from losses to a holder of a financial obligation, such as a municipal bond or asset-backed security, in the event of a default.

The new rule, called FASB Statement No. 163, will take effect for fiscal years beginning after Dec. 15, 2008. It also requires expanded disclosures about financial guarantee insurance contracts, FASB said.

Companies that provide financial guarantee insurance, include MBIA Inc (MBI.N: Quote, Profile, Research), Security Capital Assurance Ltd (SCA.N: Quote, Profile, Research), Assured Guaranty Ltd (AGO.N: Quote, Profile, Research) and Ambac Financial Group Inc (ABK.N: Quote, Profile, Research). (Reporting by Emily Chasan; Editing by Andre Grenon)

Source : http://www.reuters.com/

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