1. 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 ASB update on IFRS – Nicholas Bauer 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 ASB update on IFRS – Nicholas Bauer Canadian Institute of Actuaries Canadian Institute of Actuaries L’Institut canadien des actuaires L’Institut canadien des actuaires

2. History  IFRS working group formed spring 2008  Analysis of IFRS and identification of priority projects for conversion as of 1 Jan. 2011  Prior year comparables required as of conversion  Hence target date for final insurance related standards in place by November 2009  Key insurance projects  Scope and reinsurance  Accepted actuarial practice  Other projects  PPICP - but target date mid-2010 (no quarterly reporting required)  Post-employment benefits: watching brief only 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009

3. Scope and Reinsurance  NOI published March 15 2009  ED published July 15, comment deadline September 18 (tomorrow)  Target date for final standard: November 2009  Implementation date: January 1, 2011  Early implementation to be prohibited 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009

4. Scope and Reinsurance  Key changes – Part 1000 General Standards  Definitions to conform to IFRS 4  Insurance contract  Insurance contract liabilities  Insurer  Reinsurance recoverables  Policyholder (hence new terms “policy owner” and “policy dividends”, not formally defined) 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009

5. Scope and Reinsurance  Key changes – Part 2000 Insurance  2100 Insurance Contract Valuation: all insurance  Scope restricted to insurance contracts for purposes of GAAP financials  (insurance contracts covered by IFRS 4)  Extension of scope  Valuation of insurance contracts for non-PAEs, if financials prepared pursuant to GAAP (not necessarily IFRS) – legal form of insurer unimportant (e.g. valuation of quasi-insurer liabilities scoped in)  Valuation of policy liabilities for statutory/regulatory purposes other than financials 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009

6. Scope and Reinsurance  Key changes – Part 2000 Insurance:  2100 Insurance Contract Valuation: all insurance  Insurance contract liabilities and reinsurance recoverable assets must be presented separately  Valuation method (section 2130) focuses on net liabilities, but  Both must be appropriate  2200 and 2300 Insurance Contract Valuation: (P&C and Life and Health, respectively)  Consequential changes only 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009

7. Accepted Actuarial Practice  Reason for the project: requirement under ICA (365(2)) for AA to value policy liabilities in accordance with AAP  Issue: do investment contracts and service contracts valued under IFRS comply?  NOI published on April 14 2009  Decision taken at August 27 meeting of ASB not to amend the Standards  On balance, ASB concluded that current standards permit AA to opine that valuation complies with AAP  Feedback from PC strongly supported that position  Announcement from ASB is about to be published 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009

8. Quo Vadis ASB?  PPICP project ongoing  Watching brief on new developments and their potential impact on Standards  IFRS are being continually updated  Cooperation with PC - chair of PC is ex officio member of ASB  Preparation for the announced revision of IFRS 4 (commonly referred to as Phase II)  Timing uncertain (2013? Later?)  Major changes inevitable, so long lead times likely to be needed  Support to Regulators to ensure continued reliance on the profession 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009