The biggest overhaul of insurance accounting in 30 years was to advance a step on Thursday with the release of a proposal that some insurers fear could make their profits more volatile.

In a move to align financial statements worldwide, the U.S. Financial Accounting Standards Board (FASB) aims to shine a light into what some call the “black box” of insurers’ finances.

By proposing that insurers revalue policies each quarter and recognize revenue later, FASB is trying to make insurers’ books more relevant and useful to investors.

The proposed FASB rule would require updating policies with more current data on interest rates, mortality rates, frequency of claims and the like. It would also require recognizing revenue as coverage is provided, not when premiums are received.

FASB will seek comments through Oct. 25. The standard is not likely to take effect before 2018, accounting experts said.

Investors are often wary of the insurance sector because of its murky accounting and because some long-term policies can make it difficult to estimate future profits and losses.

Future payouts to policy-holders are a huge uncertain liability for insurers, which typically use prior years’ experience to figure out the costs of future claims.

The existing accounting standard has been in use for 30 years and some insurers are reluctant to make a costly switch, accounting experts said.

“This will be very expensive to implement because it will require new data to be collected and so many actuarial forecasting models,” said Donald Doran, a partner in PricewaterhouseCoopers’ insurance practice.

CONTROVERSY OVER INTEREST RATES

FASB has been working with the London-based International Accounting Standards Board since 2009 to align insurance accounting worldwide.

FASB sets U.S. accounting rules, called generally accepted accounting principles (GAAP). IASB sets international financial reporting standards (IFRS), used in more than 100 countries. The boards agree on many points but not on others, such as measuring the riskiness of cash flows from insurance policies.

IASB will require a separate risk adjustment, reflected in earnings, while FASB will not. IASB issued a separate proposal on insurance accounting last week.

FASB will monitor comments on IASB’s proposal and seek a more comparable standard, a spokeswoman for the board said.

One key disagreement is the impact of changing interest rates on profits. Insurers have said that quarterly earnings adjustments for interest rates would make earnings too volatile, while being irrelevant for businesses with long-term contracts.

Seeking a compromise with insurers, FASB will propose that interest rate changes not be reflected in earnings, but in a catch-all “other comprehensive income” entry. But earnings would still be more volatile than before because they will reflect more current data in other areas, such as death rates and claims’ experience, accounting experts said.

COMPLEXITY, HIGHER COSTS FEARED

Some insurers complained that the compromise would make the standard too complex. Property and casualty companies complained the new standard is unsuitable for them.

“The proposals would result in the presentation of information that users have communicated they do not want,” a group of non-life insurers said in a letter to FASB in November.

Interest rates are a major factor in many insurers’ future liabilities, which are “discounted” or reduced to come up with their current value. The higher the interest rates are, the bigger the discount and the lower the liabilities. That can have a big impact on life insurers, whose coverage lasts many years.

Insurers currently use older interest rates to discount liabilities, making liabilities appear lower than they would be if the low rates prevailing now were used.

Rating agency Moody’s Investors Service warned in December that current accounting rules were masking the harm done to insurers by low interest rates. The agency said it might downgrade the credit ratings of multiple U.S. insurers if current rates persist beyond 2015.