Currently life settlements underlying asset of an individual life insurance policy are measured by accounting rules set by The Financial Accounting Standards Board. The FASB develops United States private sector accounting rules. Recently the International Accounting Standards Board or IASB requested different classifying and measuring methods for the asset of a life insurance settlement which is an individual life insurance policy. The goal is to have all accounting entities fairly measure the value of life settlements. The Financial Accounting Standards Board wants a similar valuation strategy. The proposed new rules would exempt ordinary life policies which uses a life insurance component in their valuation method. Life settlements are different since there is no insurable interest to the investor and technically the investor is not considered the policy owner. Currently a single accounting method is used to value all life products. Some concerns against an accounting approach to segregate life products include elimination of generally accepted actuarial assumptions and the use of other useful information.
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