INSURANCE companies' accounts should become more transparent following the introduction of new regulations for their preparation by the Minister of State for Commerce, Mr Pat Rabbitte.

The regulations are back dated to apply to accounts prepared for the accounting year beginning on or after January 1st, 1995.

The new rules fall under the auspices of the European Community's (Insurance Undertakings: Accounts) Regulations 1996. These will implement the provisions of the EU directives on insurance companies passed by the EU Council in December 1991.

The regulations are aimed at improving the transparency of published accounts and at facilitating comparison of insurers' accounts in different EU countries.

Companies will have to disclose unrealised gains and losses in the value of investments held by the insurance company.

Up to now, only realised gains and losses (profits and losses on the sale of investments) had to be disclosed in the annual accounts.

Companies can choose how to account for the value of their investments - historic value or market value.

However, in the notes to the accounts, the companies will have to disclose their investments' value under the valuation option not used.

Because of widely differing accounting practices in the member states, insurers have been given options for dealing with different accounting issues.

This is not expected to reduce the comparability of results across member states because additional notes to the accounts will be required.

These notes are expected to add information on the alternative calculation methods which could have been used in the preparation of the profit and loss account and the balance sheet.