TIA Section C - Odomorik 22-23 Flashcards
1
Q
A
2
Q
A
- GAAP creates a DAC asset to defer the recognition of acquisition expenses, to match the recognition of earned premium.
- SAP does not allow deferring the expenses. Instead, all costs are expensed as incurred.
- Also under SAP, if the insurer enteres a reinsurance agreement that has a ceding commission that exceeds the acquisition costs, the insurer must create a liability to reflect the difference between the two.
3
Q
A
Under SAP, the commissions & acquisition costs do not need to be considered to the extent that they have already been expensed.
- GAAP: If a PDR exists, it is first netted from the DAC. If it completely eliminates the DAC, the excess should be recognized as the PDR liability
- SAP: Recognized as either a write-in liability or within the UEPR balance
4
Q
A
5
Q
A
6
Q
A
7
Q
A
8
Q
A
9
Q
A
10
Q
A
11
Q
A
12
Q
A
13
Q
A
14
Q
A
15
Q
A
16
Q
A
17
Q
A
18
Q
A
19
Q
A
20
Q
A
21
Q
A
22
Q
A
23
Q
A
