What is fas113?

Financial Accounting Statement (FAS) 113,1. “Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts” provides guidance on how to account for reinsurance transactions that meet certain risk transfer require- ments. It was effective for fiscal years beginning after Dec. 15, 1992.

What is DAC recoverability?

The DAC is recoverable if the K-factor is less than 100%. If there is an unearned revenue liability (URL), it may even be recoverable if the K-factor is higher than 100%.

What are deposit type contracts?

As discussed in SSAP No. 50, deposit-type contracts are those contracts that do not subject the reporting entity to any risks arising from policyholder mortality or morbidity. Deposit-type contracts frequently grant policyholders significant discretion over the amount and timing of deposits and withdrawals.

What FAS 13?

FAS 13 means Statement of Financial Accounting Standards (SFAS) No. 13, as amended and interpreted from time to time. 13 as promulgated by the Financial Accounting Standards Board.

What is DAC insurance?

What Are Deferred Acquisition Costs (DAC)? Deferred acquisition costs (DAC) is an accounting method that is applicable in the insurance industry. Using the DAC method allows a company to defer the sales costs that are associated with acquiring a new customer over the term of the insurance contract.

What is DAC and UPR?

• Retrospective assessment (UPL) – Unearned premium liabilities (UPL) are made up of. unearned premium reserve (UPR) less deferred. acquisition cost (DAC) – Under the retrospective view, the written premium.

What is asset valuation reserve?

An asset valuation reserve (AVR) is capital required to be set aside to cover a company against unexpected debt. The asset valuation reserve (AVR) serves as a backup for equity and credit losses. A reserve will have capital gains or losses credited or debited against the reserve account.

What is interest maintenance reserve?

An Interest Maintenance Reserve (IMR) is a reserve of funds and other assets that are held according to standard accounting principles in order to deal with fluctuations in the interest rate. The value of financial vehicles like bonds or mortgages can change along with the interest rate.