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CIA Annual Meeting Assemblée annuelle de l’ICA

CIA Annual Meeting Assemblée annuelle de l’ICA. June 29 & 30, 2006 Ÿ Les 29 et 30 juin 2006 Ottawa, Ontario. CIA Annual Meeting Ÿ Assemblée annuelle de l’ICA. s.3855 One company’s approach. Lynda Sullivan. Classifying Financial Instruments. Insurance contracts excluded

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CIA Annual Meeting Assemblée annuelle de l’ICA

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  1. CIA Annual MeetingAssemblée annuelle de l’ICA June 29 & 30, 2006 Ÿ Les 29 et 30 juin 2006 Ottawa, Ontario

  2. CIA Annual Meeting ŸAssemblée annuelle de l’ICA s.3855 One company’s approach Lynda Sullivan

  3. Classifying Financial Instruments • Insurance contracts excluded • Real estate not addressed – continue to defer & amortize realized and unrealized at 3% per quarter

  4. DRAFT 3855 classifications

  5. Current CGAAP If in a hedge = valued on the same basis as the hedged item. If not in a hedge = treated like an equity (move to market at 5% per quarter) Current USGAAP and future CGAAP Derivatives always carried at fair value. Unrealized gains/losses flow through income unless the derivative is a cash flow hedge or net investment hedge, then effective portion of the unrealized gains/losses are recorded in OCI. Hedge accounting Is optional. Ineffectiveness flows through income. Should elect for AFS & loans portfolios Derivatives and election of hedge accounting

  6. Investment systems/processes will change Yield analysis will change CALM roll-forward will be re-worked Crediting rate process to change due to yield changes – no more smoothing via DRGs of today Need for clarity in external disclosures Downstream Issues of 3855

  7. Project structures in place (steering group, project group, implementation plans) Started out with the analysis and design recommendations ensuring each area understood the interdependencies and the recommendations worked for all (mostly Corporate accounting, actuarial, ALM and Investments). Phased education roll out and communication plans Expanded working group and detailed project status reviews to include business areas Project approach

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