The Accounting Standards Board has announced details of how it intends to carry out an urgent study into the accounting for with-profits business by life insurers. This follows the request from HM Treasury in relation to issues raised by Lord Penrose in the report of his inquiry into the affairs of the Equitable Life Assurance Society, published on 8 March.

To assist the Board in its study, the Board has established an Advisory Panel to provide recommendations to the Board and, as relevant, its Urgent Issues Task Force.

The Advisory Panel is chaired by Julian Hance, who stepped down as Group Finance Director of Royal & Sun Alliance Insurance Group plc at the end of March.

Other members are:

Philip Broadley, Group Finance Director, Prudential plc

Andrew Crean, Managing Director Insurance, European Equity Research, Citigroup Smith Barney

Philip Easter, Managing Director Group Finance, Aviva plc

Andrew Lennard, Technical Director, Accounting Standards Board

Peter Needleman, Life Practice Director, Tillinghast

Chris Nunn, member of the Urgent Issues Task Force, former Technical Partner of Andersen

Paul Sharma, Head of Prudential Risks and Accounting, Financial Services Authority (FSA)

Observers from the Department of Trade and Industry and HM Treasury.

The Panel has been tasked with investigating and making recommendations for UK accounting standards relating to with-profits life assurance business that may realistically and feasibly be made for 2004 financial reporting. In this context it is likely to draw on current developments in FSA prudential regulation. The Panel will also consider recommendations to appropriate bodies for accounting changes from 2005.

Julian Hance will attend Board meetings for the next few months to report on the Panel’s deliberations and to take the Board’s advice.