Description: GAAP's elimination of gross profit as a basis for amortization of deferred acquisition costs enables the accounting for reinsurance of universal life contracts to better reflect the economic protection provided by reinsurance. This article takes a fresh look at the standards of accounting for universal life contracts and for reinsurance, then puts them together to find the techniques that best account for that protection.

Description: This is the third in a series of articles about accounting for reinsurance under GAAP Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). It looks at some techniques that have been used to account for long-duration reinsurance under existing GAAP (before LDTI). It looks at whether and how those techniques can be updated to comply with the updated standards and evaluates their effectiveness against compliance, performance, and simplicity objectives.

Description: This is the fourth in a series of articles about accounting for reinsurance under GAAP Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). It looks at some concerns that arise from the relationship between ceded reinsurance and the underlying contracts. Recognizing a lack of formal guidance addressing these concerns, the article aims mostly to achieve performance and simplicity objectives

Description: This paper discusses three methods for the amortization of deferred acquisition expenses, DAC and the results when actual experience differs significantly from that assumed. The methods include a static approach with prescheduled amortization, a dynamic technique called the expense reserve factor method, and an aggregate or accumulated premium revenue method. A discussion follows the paper. From Transactions of Society of Actuaries 1978, Vol. 30.

Description: Presenters discuss: [1] market-value accounting, [2] accounting for mortgage-backed securities [MBSs] and collateralized mortgage obligations [CMOs], [3] the emergence of earnings under FAS 60 and FAS 97 products, and [4] effectively communicating financial results to management. Session 10 of the 1992 Valuation Actuary Symposium.

Description: This session at the 1998 Valuation Actuary Symposium examines Purchase GAAP accounting for life insurance acquisitions and identifies the major steps for implementing GAAP for acquisitions.

Description: 1998 Valuation Actuary Symposium. The speakers provided an overview of the GAAP accounting prior to SFAS 133, an example of that guidance and how the accounting works, the new GAAP guidance, the new SFAS 133, and deferred acquisition cost considerations for equity-indexed annuities.

Description: 1998 Valuation Actuary Symposium. The speakers discussed dissecting and rearranging GAAP financials to provide more meaningful information and a comparison of the FAS 60 format of reporting earnings to a source-of-earnings format.

Description: In September 2005, the AICPA issued SOP 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts. The SOP provides accounting guidance for DAC on internal replacements of insurance and investment contracts other than those specifically mentioned in FAS 97. Article discusses implementation issues.

Description: US GAAP for Life Insurers chapter 13 spreadsheets showing the development of the GAAP accounting entries for various classes of investments: bonds, CMOs, and mortgage loans. Please see the book US GAAP for Life Insurers for further information on US GAAP accounting.