Limited impact of new accounting standards on Canadian life insurance

12/21/06 - UBS

NEW YORK, December 21 (newratings.com) – Analyst Jason Bilodeau of UBS expects the adoption of the new accounting standards to have a limited impact on the Canadian Life Insurance segment.

In a research note published this morning, the analyst mentions that the industry is set to adopt new accounting standards that would impact the recognition of securities gains as well as losses from 1Q07 onwards. The adoption is unlikely to result in a significant reassessment of either the valuation metrics or earnings power in the life insurance sector, the analyst says. The change would provide a onetime boost to book values and exert pressure on MCCSR ratios, UBS believes.