# ASC 944-20-S99: Financial Services—Insurance — Insurance Activities — SEC 99 SEC Materials Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/944/20/#sec-99-sec-materials) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T02:15:47.018Z to 2026-09-10T02:15:47.018Z Record version: sha256:404a8a58b38f92ee212df49ada3a6c5a63f7c42e7702d268f07850dde365326a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-20-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/944/20/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [944-20-S99-1](https://asc.understandingaccounting.org/asc/944/20/#944-20-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:47.018Z to 2026-09-10T02:15:47.018Z Record version: sha256:7ecfc12b4f4dcb7a8e098681126a2e060578e8aeee94a00d30dd099f79dbf973 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.N, Discounting by Property-Casualty Insurance Companies. - Facts: A registrant which is an insurance company discounts certain unpaid claims liabilities related to short-duration FN9 insurance contracts for purposes of reporting to state regulatory authorities, using discount rates permitted or prescribed by those authorities ("statutory rates") which approximate 3 1/2 percent. The registrant follows the same practice in preparing its financial statements in accordance with GAAP. It proposes to change for GAAP purposes, to using a discount rate related to the historical yield on its investment portfolio ("investment related rate") which is represented to approximate 7 percent, and to account for the change as a change in accounting estimate, applying the investment related rate to claims settled in the current and subsequent years while the statutory rate would continue to be applied to claims settled in all prior years. - FN9 The term "short-duration" refers to the period of coverage (see FASB ASC paragraph [944-20-15-7](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-7) (Financial Services—Insurance Topic), not the period that the liabilities are expected to be outstanding. - Question 1: What is the staff's position with respect to discounting claims liabilities related to short-duration insurance contracts? - Interpretive Response: The staff is aware of efforts by the accounting profession to assess the circumstances under which discounting may be appropriate in financial statements. Pending authoritative guidance resulting from those efforts however, the staff will raise no objection if a registrant follows a policy for GAAP reporting purposes of: - Discounting liabilities for unpaid claims and claim adjustment expenses at the same rates that it uses for reporting to state regulatory authorities with respect to the same claims liabilities, or - Discounting liabilities with respect to settled claims under the following circumstances: - (1) The payment pattern and ultimate cost are fixed and determinable on an individual claim basis, and - (2) The discount rate used is reasonable on the facts and circumstances applicable to the registrant at the time the claims are settled. - Question 2: Does the staff agree with the registrant's proposal that the change from a statutory rate to an investment related rate be accounted for as a change in accounting estimate? - Interpretive Response: No. The staff believes that such a change involves a change in the method of applying an accounting principle, i.e., the method of selecting the discount rate was changed. The staff therefore believes that the registrant should reflect the cumulative effect of the change in accounting by applying the new selection method retroactively to liabilities for claims settled in all prior years, in accordance with the requirements of FASB ASC Topic 250, Accounting Changes and Error Corrections. Initial adoption of discounting for GAAP purposes would be treated similarly. In either case, in addition to the disclosures required by FASB ASC Topic 250 concerning the change in accounting principle, a preferability letter from the registrant's independent accountant is required. ##### [944-20-S99-2](https://asc.understandingaccounting.org/asc/944/20/#944-20-S99-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:47.018Z to 2026-09-10T02:15:47.018Z Record version: sha256:85682a33dfcbec7ff1e08c955f4fe8f59a5abadc96499b2eaaf196dc952c19c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Observer Comment: Accounting for Intangible Assets Arising from Insurance Contracts Acquired in a Business Combination. - The SEC staff will require registrants to provide the following disclosures about intangible assets arising from insurance contracts acquired in a business combination in filings with the Commission: - 1\. A description of the registrant's accounting policy - 2\. An analysis of the intangible assets arising from insurance contracts acquired in a business combination account for each year for which an income statement is presented—that analysis should include the intangible assets arising from insurance contracts acquired in a business combination balance at the beginning of the year, the amount of additions during the year arising from acquisitions of insurance companies, the amount of amortization during the year, the amount of any write-offs during the year due to impairment and how those write-offs were determined, and the balance at the end of the year - 3\. The estimated amount or percentage of the end-of-the-year balance of intangible assets arising from insurance contracts acquired in a business combination to be amortized during each of the next five years.