Description: US GAAP for Life Insurers chapter 3 spreadsheets. These various spreadsheets show various tables related to insurance company expenses both deferrable and non-deferrable along with DAC and Persistncy bonus amortization schedules. Other tables shown include account value roll forwards Expected Gross Profits EGPs. Please see the book US GAAP for Life Insurers for full information on US GAAP Accounting.

Description: In 2018, the Financial Accounting Standards Board (FASB) adopted significant revisions to the U.S. GAAP insurance accounting literature, via Accounting Standards Update (ASU) 2018-12. The title of ASU 2018-12 is “Targeted Improvements to the Accounting for Long-Duration Contracts,” and as a result, a common acronym for ASU 2018-12 is LDTI (long-duration targeted improvements).

Description: This article discusses key considerations and differences in measurement requirements between IFRS 17 and LDTI, leveraging a term insurance example to illustrate potential impacts on liabilities and, ultimately, earnings emergence.

Description: Discusses: [1] the effects of Financial Accounting Standard No. 97 [FAS 97] on recoverability and loss-recognition issues, [2] interest-crediting strategy, ways and means of maintaining the planned interest spread, the effects of the various strategies on lapse experience, and the ultimate effect on recoverability of the deferred acquisition costs, and [3] premium-deficiency testing and the modification of interest, mortality, and expense margins to satisfy the question of loss recognition, or lack of the ability to recover the remaining deferred asset. From the 1988 Record of Society of Actuaries, Vol. 14, No. 3.

Description: This session at the SOA 1990 Annual Meeting looks at mutual company GAAP issues including objectives, common features, comparison to stock company GAAP, and the effect on management of the company.

Description: This article examines the impact of FAS 97 on the emergence of earnings for the most recent versions of UL products, those with interest rate and return of load kickers.

Description: This report summarizes the results of a research project undertaken by the Society of Actuaries to study the possible effects of the International Accounting Standards Board’s IASB Discussion Paper describing its Preliminary Views on Insurance Contracts on nine representative U.S. life, health and annuity products.

Description: After a summary of FASB decisions in their GAAP Targeted Improvements project, this article describes several issues that will need to be resolved either by the board or in actuarial practice and argues for seeking solutions that provide meaningful results without overly complicating valuation processes.

Description: Understanding the Deferred Acquisition Cost (DAC) asset balance movements from one reporting period to the next can be a challenge when reportinged under FAS 97. The mechanics of FAS 97 call for an amortization ratio (i.e., k factor) that forces the amortization of the DAC asset to be matched to the earnings received over the life of the product. However, the fact that the k factor is dynamically set results in “unlocking” components of the DAC rollforward. This article shows how the basic equation for the amortization ratio can be used to derive equations that provide insights into what the DAC balance represents. Furthermore, partial derivatives of these equations are used to show how unexpected changes in the Estimated Gross Profit (EGP) stream impact the amortization and unlocking components of the DAC rollforward.

Description: Presentation of formulas for measuring the effects of experience variances and assumption changes on traditional contract DAC and benefit reserves under GAAP targeted improvements (ASU 2018-12).