The acquirer shall carry forward the acquiree's classification of an acquired contract as an insurance or reinsurance contract or a deposit contract based on an understanding of the contractual terms of the acquired contract and any related contracts or agreements at the inception of the contract or, if the terms of those contracts or agreements were later modified in a manner that would change the classification, at the date of that modification (which may be the acquisition date).
The acquirer shall recognize the assets and liabilities arising from the rights and obligations of the insurance and reinsurance contracts acquired in the business combination.
A dividend payable to stockholders, whether declared by a stock insurer or its holding entity, is a common corporate capital transaction. Cash dividends shall be recognized as a liability on the declaration date.
If a distribution by the mutual insurance holding entity is determined to be a policyholder dividend expense, the insurance subsidiary shall recognize the policyholder dividend in its separate financial statements as an expense with recognition of a corresponding capital contribution from the mutual insurance holding entity.
The mutual insurance holding entity shall reflect the amount of the distribution as a capital contribution to the insurance subsidiary in its separate financial statements. In consolidated financial statements, the expense shall be reported and the capital contribution shall be eliminated.