{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/944/30/#55-implementation-guidance-and-illustrations","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"944","topic_title":"Financial Services—Insurance","subtopic":"944-30","subtopic_title":"Acquisition Costs","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"944-30-55-1","para":"55-1","html":"
Paragraph 944-30-25-1A(a) requires that an insurance entity capitalize incremental direct costs of contract acquisition. Such costs include the following:
  1. a
    An agent or broker commission or bonus for successful contract acquisition or acquisitions.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2010-26.
  3. c
    Medical and inspection fees for successful contract acquisition or acquisitions.
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Examples of other costs related directly to the insurer's acquisition activities in paragraph 944-30-25-1A(b) that would not have been incurred by the insurance entity had the acquisition contract transaction(s) not occurred include all of the following:
  1. a
    Reimbursement of costs for air travel, hotel accommodations, automobile mileage, and similar costs incurred by personnel relating to the specified activities
  2. b
    Costs of itemized long-distance telephone calls related to contract underwriting
  3. c
    Reimbursement for mileage and tolls to personnel involved in on-site reviews of individuals before the contract is executed.
","snippet":"Examples of other costs related directly to the insurer's acquisition activities in paragraph 944-30-25-1A(b) that would not have been incurred by the insurance entity had the acquisition contract transaction(s) not occu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:555f187bbde7de756767b6b9cbe67d29463e2f5602f89ab95e2529aa1795d1d4","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-1B","para":"55-1B","html":"
Costs for software dedicated to contract acquisition are not eligible for deferral as deferred acquisition costs under the definition of that term. Such costs are not other costs related to those activities that would not have been incurred but for that contract under the definition of that term.
","snippet":"Costs for software dedicated to contract acquisition are not eligible for deferral as deferred acquisition costs under the definition of that term. Such costs are not other costs related to those activities that would no…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4c214665482ebd9f5c38ff9ee1406bf6756bc64f4052b05b8f8136fc02a221e7","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-1C","para":"55-1C","html":"
Payroll-related fringe benefits include any costs incurred for employees as part of the total compensation and benefits program. Examples of such benefits include all of the following:
  1. a
    Payroll taxes
  2. b
    Dental and medical insurance
  3. c
    Group life insurance
  4. d
    Retirement plans
  5. e
    401(k) plans
  6. f
    Stock compensation plans, such as stock options and stock appreciation rights
  7. g
    Overtime meal allowances.
","snippet":"Payroll-related fringe benefits include any costs incurred for employees as part of the total compensation and benefits program. Examples of such benefits include all of the following:\n(a) Payroll taxes\n(b) Dental and me…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:047c3fa078b8d063b278ac1f4b73edecd8bb180d8ae88860f1822d4271b6679d","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-1D","para":"55-1D","html":"
This Subtopic does not specify how costs are to be determined but rather what costs must be deferred. In many instances, standard costing may be used to estimate the costs to be deferred in accordance with this Subtopic. For certain contracts, the cost of acquisition may be similar and standard costing may be appropriate for those contracts, while other contracts may be of such a nature that costs must be identified separately. Insurers may use any one or a combination of methods that will provide adequate information to report financial results in accordance with this Subtopic. Development of a standard costing system will require periodic analysis of variances and, if necessary, adjustment of standard costing estimates. Possible standard costing methods that may be used to measure costs applicable to transactions that have occurred include standard costs, actual costs, job process costs (for example, homogeneous policies), or job order costs (for example, specific contracts).
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The successful-efforts accounting notion utilized at an entity-wide level may result in a standard costing system that does not accurately reflect the amount of costs that may be deferred and amortized under this Subtopic. Successful acquisition efforts can be determined as a percentage of each function (for example, application, underwriting, and medical and inspection) and may be based on the percentage, adjusted for idle time and time spent on activities for which the related costs cannot be deferred, of successful and unsuccessful efforts determined for each function.
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All other contract acquisition-related costs, including costs related to activities performed by the insurer for soliciting potential customers (except direct-response advertising capitalized in accordance with paragraph 944-30-25-1AA), market research, training, and administration, should be charged to expense as incurred. Employees' compensation and fringe benefits related to those activities, unsuccessful contract acquisition efforts, and idle time should be charged to expense as incurred. Administrative costs, rent, depreciation, and all other occupancy and equipment costs are considered indirect costs and should be charged to expense as incurred.
","snippet":"All other contract acquisition-related costs, including costs related to activities performed by the insurer for soliciting potential customers (except direct-response advertising capitalized in accordance with paragraph…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e6ee21608b07526bc65904ba809cbc3e7f879693ffdfb49b65cca226027d3775","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-1G","para":"55-1G","html":"
The portion of total compensation of executive employees that relates directly to the time spent approving successful contracts may be deferred as acquisition costs under the definition of that term. For example, the amount of compensation allocable to time spent by members of a contract approval committee is a component of acquisition costs.
","snippet":"The portion of total compensation of executive employees that relates directly to the time spent approving successful contracts may be deferred as acquisition costs under the definition of that term. For example, the amo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:443b29a0995ec5032ee80e2243243ac760b9df99f7e5ff90b49dbf84ecc4dcd1","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b38490fd3a5ac875b9db2aefbe81c8b4aa2bf078f082c510dd3353bda7af6e4d","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"block":"Long-Duration Contracts","heading":"Illustrations","paragraphs":[{"citation":"944-30-55-2","para":"55-2","html":"
This Example illustrates the tabular rollforward that an insurance entity should disclose in its financial statements to meet the requirements of paragraph 944-30-50-2B(a).
  1. a
    Subparagraph superseded by Accounting Standards Update No. 2018-12.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2018-12.
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This Example illustrates the computation of amortization on a constant level basis. In this Example, a block of long-duration guaranteed-renewable five-year term life insurance contracts are grouped and amortized in proportion to the amount of insurance in force to derive an approximate level amortization amount on an individual contract basis. In 20X1, the insurance entity defers costs totaling $80 and projects the balance of insurance in force over 5 years. The insurance entity would need to include mortality and lapse assumptions to project the balance of insurance in force; however, for ease of illustration, no mortality or lapses are assumed (see paragraph 944-30-55-7B for subsequent changes to the mortality and lapse assumptions).
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At the beginning of 20X2, the entity incurs an additional $10 of deferrable acquisition costs and computes the amortization rate and expense for 20X2 as follows.
","snippet":"At the beginning of 20X2, the entity incurs an additional $10 of deferrable acquisition costs and computes the amortization rate and expense for 20X2 as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2f36c3d780c788b546fc1edf1f1784ddbf6097c2e2e3f04952b55db5798bbf4","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-7B","para":"55-7B","html":"
At the end of 20X2, the entity experienced unexpected contract terminations that resulted in the writeoff of deferred acquisition costs at the end of the reporting period. In addition, the entity updated the expected balance of insurance in force for the remaining periods.
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A flowchart summarizing the accounting model set out in the Internal Replacement Transactions Subsections of this Subtopic follows.
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The following Example illustrates the application of the guidance in the Internal Replacement Transactions Subsections of this Subtopic to an internal replacement transaction that results in a substantially unchanged contract.
  1. a
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  2. b
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This Example assumes the following:
  1. a
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  2. b
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  3. c
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  4. d
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  5. e
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The exchange of the single premium deferred annuity contract for a newer single premium deferred annuity contract in this Example results in the replacement contract being substantially unchanged from the replaced contract, due to the following:
  1. a
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  2. b
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  3. c
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  4. d
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  5. e
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  6. f
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Paragraph superseded by Accounting Standards Update No. 2018-12.
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The following represents implementation guidance for contract modifications and the application of the guidance in Section 944-30-35 for evaluating whether the internal replacements are substantially changed from the replaced contracts. The guidance is based on the specific facts and circumstances; the same conclusions may not be reached for other modifications because of differing facts or circumstances. The following cases represent contract modifications.
","snippet":"The following represents implementation guidance for contract modifications and the application of the guidance in Section 944-30-35 for evaluating whether the internal replacements are substantially changed from the rep…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6cff413ef0f2a576e7b6d4f93db9aeb9cad56fbafd23e13143e58d36938fcaf9","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-34","para":"55-34","html":"
There are several ways in which a contract holder can increase death benefit coverage on a traditional whole life insurance contract.
","snippet":"There are several ways in which a contract holder can increase death benefit coverage on a traditional whole life insurance contract.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:65d7f593963556e5ea47bf0fe41bc008639180fb2b83c620bae1fe59cf75d1ff","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-35","para":"55-35","html":"
An option to purchase additional insurance rider gives the contract holder the right to purchase additional insurance coverage with no additional underwriting. That is, the contract holder can increase the face value of the policy for the same type of insurance coverage and in the same form as that provided by the original contract. The additional premium charged is not in excess of an amount that would be commensurate with the additional insurance coverage obtained. The rider could be included in the original contract or added subsequently to its issuance. This is an example of a nonintegrated contract feature. Once purchased, the benefit under the option to purchase additional insurance rider generally is accounted for as a separate contract.
","snippet":"An option to purchase additional insurance rider gives the contract holder the right to purchase additional insurance coverage with no additional underwriting. That is, the contract holder can increase the face value of …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cc07973e0aecd527e5d999b339ad51db1e2d30d5eb816ead09e043099461a3dc","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-36","para":"55-36","html":"
The contract holder obtains a second life insurance policy for an incremental face amount, with underwriting required on the new policy only. The original contract remains in force without change. This transaction does not fall within the definition of an internal replacement in Section 944-30-35. The accounting for the original contract remains unchanged and the new contract is accounted for independently of the original contract. Any deferrable acquisition costs associated with the new contract are deferred and amortized in accordance with the guidance in Section 944-30-35, as applicable.
","snippet":"The contract holder obtains a second life insurance policy for an incremental face amount, with underwriting required on the new policy only. The original contract remains in force without change. This transaction does n…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b7ebf069987fbe0c2d217d01535684feaabe08ad80d8d827856f4d5b45c837ba","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-37","para":"55-37","html":"
The increased face amount (death benefit) of a traditional life insurance contract effectuated through an amendment or rider to the original contract is considered a nonintegrated feature that should be accounted for separately from the existing life insurance contract, provided that the additional premium charged for that incremental insurance coverage is not in excess of an amount that is commensurate with the incremental insurance coverage and does not result in the explicit or implicit reunderwriting or repricing of other components of the contract.
","snippet":"The increased face amount (death benefit) of a traditional life insurance contract effectuated through an amendment or rider to the original contract is considered a nonintegrated feature that should be accounted for sep…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b6ca726041f957e95aece05aa3688e654e15064afe4dfe04904b03ba2d337316","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-38","para":"55-38","html":"
Universal life-type contracts are long-duration contracts that can provide either death or annuity benefits and are characterized by one of the following features:
  1. a
    One or more of the amounts assessed by the insurer against the policyholder are not fixed and guaranteed by the terms of the contract.
  2. b
    Amounts that accrue to the benefit of the policyholder are not fixed and guaranteed by the terms of the contract.
  3. c
    Premiums may be varied by the policyholder within contract limits without the consent of the insurer.
","snippet":"Universal life-type contracts are long-duration contracts that can provide either death or annuity benefits and are characterized by one of the following features:\n(a) One or more of the amounts assessed by the insurer a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2b2aa715dc1823aa460c4fe938e82983ddd4ad08cbda910960e0d8056e33fc1f","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-39","para":"55-39","html":"
The increase in face amount of a universal life-type contract through an amendment to the original contract is considered an integrated feature as the death benefit under a universal life-type contract is equal to the excess of face amount over contract account value. In this example, only the additional face amount has been underwritten during the contract amendment and the additional premium charged is not in excess of an amount that would be commensurate with the additional insurance coverage obtained. This contract amendment to increase the face amount of a universal life-type contract results in the replacement contract being substantially unchanged from the replaced contract due to the following:
  1. a
    The modification does not result in a change in the insured event, as there is no significant change in the kind and degree of mortality risk. Although the face amount of the contract has increased, it is appropriate in this example to analyze the change in degree of mortality risk by comparing the relationship of the expected cost of the benefit to charges assessed for that benefit, and there was no significant change in this relationship.
  2. b
    There is no change in the nature of the investment return rights from the replaced contract.
  3. c
    There are no changes in the charges related to the original benefits; also, the additional cost of insurance is not in excess of an amount commensurate with the additional insurance coverage obtained.
  4. d
    There is no net decrease in the balance available to the contract holder, except to pay the cost of insurance charge for the increased coverage.
  5. e
    There is no change in the participation or dividend feature of the replaced contract.
  6. f
    The modification does not result in a change to either the amortization method or revenue classification of the contract.
","snippet":"The increase in face amount of a universal life-type contract through an amendment to the original contract is considered an integrated feature as the death benefit under a universal life-type contract is equal to the ex…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a30b2f5bdb7a5ce580ac120e8cd21899ce244feeab3a77343ed0e504527b60ba","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-40","para":"55-40","html":"
A universal-life type contract may contain a no-lapse guarantee feature that provides for continuing coverage of the contract even if the account value drops to a level that cannot cover the contract charges. The contract exchange of a universal life-type contract for a universal life-type contract that contains a no-lapse guarantee results in the replacement contract being substantially changed from the replaced contract because the addition of the no-lapse guarantee changes both the period of coverage of the contract as well as introduces a combination of mortality and investment risk. The analysis would be the same if the change had been achieved through the addition of a no-lapse guarantee rider, as it would be considered an integrated benefit (the benefit is a function of the contract account value) and would need to meet the conditions of paragraph 944-30-35-37. If, however, the contract holder had elected to add a no-lapse guarantee feature that was included in the original contract (and met the specifications of paragraphs
944-30-35-26 through 35-28
), the modification would not be considered an internal replacement.
","snippet":"A universal-life type contract may contain a no-lapse guarantee feature that provides for continuing coverage of the contract even if the account value drops to a level that cannot cover the contract charges. The contrac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bd65a4c0e272759b60536eb67f17b229e1407a11b176cfae4986ce3b91a6a2fd","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-41","para":"55-41","html":"
A second-to-die feature incorporates multiple mortality events within a single contract, as payment to the beneficiary is made, assuming the contract remains in force, only after both insured individuals die. The contract exchange of a universal life-type contract for a universal life-type contract that contains a second-to-die provision results in the replacement contract being substantially changed from the replaced contract because the addition of the second-to-die feature changes the insured event, as now two mortality events must occur for the beneficiary to obtain the proceeds. If the modification were achieved through amendment, endorsement, or rider rather than through a contract exchange, the analysis and conclusion would be the same as for the contract exchange because the second-to-die provision is an integrated feature.
","snippet":"A second-to-die feature incorporates multiple mortality events within a single contract, as payment to the beneficiary is made, assuming the contract remains in force, only after both insured individuals die. The contrac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aea212a6c70792f7ef2de9f13387ed40db5f6b29cf2e7fb6143f4d133b85e6fd","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-42","para":"55-42","html":"
An automobile insurance contract is a short-duration contract that generally provides coverage for personal injury and automobile damage sustained by the insured and liability to third parties for losses caused by the insured. A newly purchased car being added to an existing automobile policy with no change in the other vehicles covered or the premium related to the other vehicles under the contract results in additional nonintegrated contract coverage that should be accounted for separately from the existing automobile contract coverage, assuming the underwriting and price for coverage of the new car is determined separately and there is no change, explicit or implicit, in the pricing of the base contract.
","snippet":"An automobile insurance contract is a short-duration contract that generally provides coverage for personal injury and automobile damage sustained by the insured and liability to third parties for losses caused by the in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c8596dcc32b2c9b9d01f17c6ca4a2925b0450bfd198d3293b0e97c92e09acb81","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-43","para":"55-43","html":"
If one of the existing automobiles under the contract described in paragraph 944-30-55-42 above is removed from the automobile contract, it is considered the extinguishment of nonintegrated contract coverage and should be accounted for as an extinguishment of only the balances related to that nonintegrated coverage. The amount refunded to the contract holder from the change in the coverage is determined in accordance with terms that are fixed in the contract or applicable state law or regulation, and no reunderwriting is required for other coverage. The amount refunded to the contract holder reduces the related unearned revenue liability, and unamortized deferred acquisition costs related to the extinguished nonintegrated contract coverage are eliminated.
","snippet":"If one of the existing automobiles under the contract described in paragraph 944-30-55-42 above is removed from the automobile contract, it is considered the extinguishment of nonintegrated contract coverage and should b…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:33cb3c36ca0f5086457e3d9d6a55bdb4c6e349a2031817c55c5cbf43e614331d","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-44","para":"55-44","html":"
Assume the automobile insurance contract described in paragraph 944-30-55-42 contains one car and one driver, the existing car is sold and replaced with another car, and coverage is changed through a contract endorsement. For accounting purposes, the original automobile contract is extinguished and coverage for a new automobile contract is established for the driver and the new car. The modification is not a reduction in coverage under paragraph 944-30-35-29, as it is a termination of all coverage in the contract, not a partial termination of coverage as described in paragraph 944-30-35-29. It is common practice to net settle the premium and commission adjustments resulting from this contract modification. For accounting purposes, there are in substance two transactions: the extinguishment of one contract, which is accounted for as a contract extinguishment under paragraphs
944-30-40-1 through 40-4
, and establishment of a new contract.
","snippet":"Assume the automobile insurance contract described in paragraph 944-30-55-42 contains one car and one driver, the existing car is sold and replaced with another car, and coverage is changed through a contract endorsement…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:87253ad85acc36f0808685c948c89056f6bf2359fa2e6bb4c0ac9afe28f18e8e","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-45","para":"55-45","html":"
The addition of a new driver to an existing automobile contract with no other changes in the contract results in additional nonintegrated contract coverage that should be accounted for separately from the existing automobile contract coverage, as the underwriting and price for coverage for the new driver is determined separately.
","snippet":"The addition of a new driver to an existing automobile contract with no other changes in the contract results in additional nonintegrated contract coverage that should be accounted for separately from the existing automo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:78d2d0cf6fca24f2ff1806403af328b0f58c44e342a9f9261fad8a199208c7f3","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-46","para":"55-46","html":"
If one of the existing drivers under the contract described in paragraph 944-30-55-44 is removed from the automobile contract, it is the extinguishment of nonintegrated contract coverage and should be accounted for as an extinguishment of only the balances related to that nonintegrated coverage. The amount refunded to the contract holder from the change in the coverage is determined in accordance with terms that are fixed in the contract or applicable state law or regulation, and no reunderwriting is required for other coverage. The amount refunded to the contract holder reduces the related unearned revenue liability, and the balance of the unamortized deferred acquisition costs related to the extinguished nonintegrated contract coverage is eliminated.
","snippet":"If one of the existing drivers under the contract described in paragraph 944-30-55-44 is removed from the automobile contract, it is the extinguishment of nonintegrated contract coverage and should be accounted for as an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d7f9566c1c24c3b1cf5ba57c0433e412d0be146f755b1bdfbe68ad25d8bbe521","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-47","para":"55-47","html":"
An increase in the collision deductible of an automobile contract is, in effect, a reduction in the coverage provided. It is not an internal replacement, but a reduction in coverage under paragraph 944-30-35-29, providing that all the terms that determine the amount refunded from the change in coverage are fixed in the original contract or by applicable state law or regulation and no reunderwriting is required for the continuing coverage. Contractual provisions that allow the contract holder to elect to decrease existing coverage at then-current rates (other than when required by state law or regulation), subject to a stated minimum and maximum, generally are not specific enough to satisfy this requirement.
","snippet":"An increase in the collision deductible of an automobile contract is, in effect, a reduction in the coverage provided. It is not an internal replacement, but a reduction in coverage under paragraph 944-30-35-29, providin…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b7d3e4ee6461b33bbaed40c1d92f1ec4405fc74965c90db0021adcccfb325728","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-48","para":"55-48","html":"
A decrease in the collision deductible of an automobile contract is, in effect, an increase in the coverage provided. It is not an internal replacement, but an election by the contract holder of coverage that was within the original contract as noted in paragraphs
944-30-35-26 through 35-28
, providing that all the terms that determine the amount of the premium related to the additional coverage are fixed in the original contract or by applicable state law or regulation and no reunderwriting is required of the original coverage. Contractual provisions that allow the contract holder to elect to add future coverage at then-current rates (other than when required by state law or regulation), subject to a stated minimum and maximum, generally are not specific enough to satisfy this requirement.
","snippet":"A decrease in the collision deductible of an automobile contract is, in effect, an increase in the coverage provided. It is not an internal replacement, but an election by the contract holder of coverage that was within …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cf826484dfb60a858aff0aadd086ec6e7213faed27b7b25527456bc06075286","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-49","para":"55-49","html":"
A homeowner's contract is a short-duration contract that generally provides coverage for loss or damage of property and personal injury occurring on the insured's property. A personal articles floater provides coverage for losses on personal property not covered under the terms of the homeowner's contract. If multiple pieces of jewelry are added to a personal articles floater, each separately identified and priced item constitutes a nonintegrated contract feature. Thus, the addition of a personal articles floater providing coverage for several new pieces of jewelry to an existing homeowner's contract, with no other changes in the contract, results in additional nonintegrated contract coverage that should be accounted for separately from the existing homeowner's contract, as the underwriting and price for coverage for the jewelry is determined separately from the homeowner's contract and does not result in the reunderwriting of the existing coverages provided by the contracts. This is true even though the items covered by the personal articles floater and the homeowner's contract share a deductible and limit in the event of a common loss. The sharing of a common deductible and limit in the event of loss does not determine whether the contract feature or coverage is integrated, as the deductible is a definition of the terms of coverage resulting from a single loss event.
","snippet":"A homeowner's contract is a short-duration contract that generally provides coverage for loss or damage of property and personal injury occurring on the insured's property. A personal articles floater provides coverage f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:238a27ecfdd36e6e587f4222e80109c3efed52f0236dfdb16866e2d3f25dc7b3","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-50","para":"55-50","html":"
A contract holder increases the coverage of a homeowner's contract, which insures a house valued at $350,000 with $300,000 of insurance coverage, to $400,000 to include a recently completed addition to the house worth $100,000. The additional layer of coverage results in a nonintegrated contract feature that should be accounted for separately from the existing homeowner's contract, provided that the additional premium charged for that incremental insurance coverage is not in excess of an amount that is commensurate with the incremental insurance coverage and does not result in the explicit or implicit reunderwriting or repricing of other components of the contract. If, however, there was substantive underwriting of the entire contract, including the original coverage, the contract would be considered to be substantially changed because substantive reunderwriting of existing contract coverage is an indicator that the insurance risk has changed significantly, and would probably also result in the repricing of the entire contract, which would result in failure to satisfy the criteria in paragraph 944-30-35-37. Additional coverage provided by a nonintegrated contract feature is considered nonintegrated even though the entire coverage provided by the contract is subject to a common deductible and limit in the event of an insured loss.
","snippet":"A contract holder increases the coverage of a homeowner's contract, which insures a house valued at $350,000 with $300,000 of insurance coverage, to $400,000 to include a recently completed addition to the house worth $1…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47a2b390f36c6c65435fc9deb466702923b4c2d7150452c98ac565788487cf30","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-51","para":"55-51","html":"
A contract holder currently has an umbrella contract from the same insurance entity as his or her homeowner's contract that provides for liability coverage with a limit of $1 million. The contract holder requests to increase the limit on the umbrella contract to $2 million. This additional layer of coverage results in additional nonintegrated contract coverage that should be accounted for separately from the existing umbrella contract, as the additional premium charged is not in excess of an amount that would be commensurate with the additional insurance coverage obtained ($1 million in excess of $1 million with no additional deductible), and there was no reunderwriting of the original coverage. If, however, there was substantive underwriting of the entire contract, including the original coverage, the contract would be considered to be substantially changed because substantive reunderwriting of existing contract coverage is an indicator that the insurance risk has changed significantly.
","snippet":"A contract holder currently has an umbrella contract from the same insurance entity as his or her homeowner's contract that provides for liability coverage with a limit of $1 million. The contract holder requests to incr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55d20cdcdb0c34cdb7dd01fa041cfbfbe8fc99da649aeeb15d9b8ad4fcead04a","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-52","para":"55-52","html":"
A long-term care product provides for a specified payment while the insured qualifies for benefits under the contract; for example, while in a long-term care facility or when receiving care at home. If the long-term care product had an authorized rate increase, the insurance entity may offer the contract holder the option of reducing coverage instead of paying additional premiums (i.e., maintain the current premium rate). For example, if the original contract provided benefit coverage of $100 a day for a $2,000 annual premium and there was an authorized increase of premiums to $2,500, the contract holder could elect to pay the increased premium or, if allowed by the insurance contract, retain annual premiums of $2,000 with reduced benefit coverage of $80 a day. In this example, the increase in premiums from $2,000 to $2,500 is related to a change in the cost of the insurance that is within ranges outlined in the contract and approved by the insurance regulator, and by itself the premium increase is not considered a modification to the contract. The contract holder election of a reduction in benefits is not an internal replacement, but rather a reduction in coverage under paragraph 944-30-35-29, if all the terms for a change in coverage are fixed in the original contract or by applicable state law or regulation and no reunderwriting of the continuing coverage is required.
","snippet":"A long-term care product provides for a specified payment while the insured qualifies for benefits under the contract; for example, while in a long-term care facility or when receiving care at home. If the long-term care…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bb32fbf55b49a57bbe14c79e233ffda5431631a3228576a81d268524816df6a4","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-53","para":"55-53","html":"
If the contract holder elected a reduction in benefits under which the terms related to a change in coverage were not fixed in the original contract, the contract modification results in the replacement contract being substantially unchanged from the replaced contract as a result of the following:
  1. a
    The insured event has not changed from the replaced contract.
  2. b
    The exchange does not change the nature of the contract holder's investment return rights.
  3. c
    No additional deposit or premium is required and there are no changes in the charges related to the original benefits in excess of the amounts specified or allowed in the original contract, as the reduction in benefits is not in excess of the corresponding reduction in premiums. (The original contract provided for benefits of $100 a day for $2,000 annual premium, the reduction in benefits to $80 a day is commensurate with the 20-percent reduction in premiums from the increased rate of $2,500 to $2,000.)
  4. d
    There is no net decrease in the balance available to the contract holder.
  5. e
    There is no change in the participation or dividend features of the replaced contract.
  6. f
    There is no change in the amortization method or revenue classification of the replaced contract.
","snippet":"If the contract holder elected a reduction in benefits under which the terms related to a change in coverage were not fixed in the original contract, the contract modification results in the replacement contract being su…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:524b144cf2505697e635a8ed83a7bc391e147757f123ef0e2225c2f7596496b8","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-54","para":"55-54","html":"
A single premium deferred annuity typically is classified as an investment contract as addressed in paragraphs
944-20-15-16 through 15-25
.
","snippet":"A single premium deferred annuity typically is classified as an investment contract as addressed in paragraphs 944-20-15-16 through 15-25.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dcf37a8fc20411ec25ad1a05c7d7ea8b91c1adbcccd3c0bb172421670bd13c66","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-55","para":"55-55","html":"
The current interest rate guarantee period of a market value annuity typically does not encompass substantially all of the expected life of the contract. At the end of an interest rate declaration period, a new crediting rate is declared by the insurance entity and may vary above the minimum guaranteed rate. The length of the initial and subsequent interest rate guarantee periods generally is selected by the contract holder. Market value annuities typically are classified as investment contracts.
","snippet":"The current interest rate guarantee period of a market value annuity typically does not encompass substantially all of the expected life of the contract. At the end of an interest rate declaration period, a new crediting…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:74743b143f720a7e774460d9be826389548adc9b96404628e162d27426b7c138","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-56","para":"55-56","html":"
In this guidance, there is no significant difference in the declared interest crediting rate (further, the change in interest rates is consistent with the change in declaration period), no change in the guaranteed minimum interest rate, no additional deposit or premium is required, and there are no surrender charges or front-end fees associated with the internal replacement. The contract exchange of a single premium deferred annuity contract for a market value annuity contract results in the replacement contract being substantially unchanged from the replaced contract as a result of the following:
  1. a
    The insured event has not changed from the replaced contract.
  2. b
    The exchange does not change the nature of the contract holder's investment return rights (crediting rate declared by insurance entity, subject to guaranteed minimum crediting rate). The single premium deferred annuity and the market value annuity are both contracts for which the interest rate is periodically reset by the insurance entity subject to a minimum interest rate guaranteed by the contract and, in this example, the current declared interest period does not represent substantially all of the expected life of the contract. The difference between the single premium deferred annuity and the market value annuity results from the manner in which the amount available to the contract holder is determined in the event the contract is terminated prematurely, not the contractual rights and provisions for the determination of the contract holder's investment return in the absence of a premature termination of the contract.
  3. c
    No additional deposit or premium is required, and there are no changes in the charges related to the original benefits.
  4. d
    There is no net decrease in the balance available to the contract holder.
  5. e
    There is no change in the participation or dividend features of the replaced contract.
  6. f
    There is no change in the amortization method or revenue classification of the replaced contract.
","snippet":"In this guidance, there is no significant difference in the declared interest crediting rate (further, the change in interest rates is consistent with the change in declaration period), no change in the guaranteed minimu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3190712b7be2b2c0d53047cef91e5d3710fb47425e261a39e220468d47113e38","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-57","para":"55-57","html":"
The single premium deferred annuity and the market value annuity are both contracts for which the interest rate is periodically reset by the insurer subject to a minimum interest rate guaranteed by the contract; the only significant substantive difference between these two contracts is the manner in which amounts are determined in the event of a premature surrender. If the declared interest rate period of the market value annuity constituted substantially all of the expected life of the contract, the change from a contract for which interest is set at the discretion of the insurer to one for which the rate is set by contract would result in a substantially changed contract.
","snippet":"The single premium deferred annuity and the market value annuity are both contracts for which the interest rate is periodically reset by the insurer subject to a minimum interest rate guaranteed by the contract; the only…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:218f57e4aa783d64e2e66d5704d3c0ba1a3dd4af6945c81601b9c8cfb3fa8d96","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-58","para":"55-58","html":"
A single premium deferred annuity has a crediting rate that is set at the discretion of the insurance entity. An equity-indexed annuity is a deferred fixed annuity contract with a guaranteed minimum crediting rate plus a contingent return based on a contractually specified internal or external equity index. Equity-indexed annuities typically are classified as investment contracts with embedded derivatives that are required to be bifurcated from the contract and accounted for separately under Topic 815 (see paragraphs
815-15-55-62 through 55-72
). Generally, the equity index feature represents a periodic crediting rate mechanism that affects the amounts credited to the contract holder's account balance, rather than representing a benefit in addition to the account balance that protects the contract holder from other-than-nominal capital market risk and exposes the insurance entity to other-than-nominal capital market risk. Periodic crediting rate mechanisms are required to be evaluated for possible bifurcation under Topic 815. However, an equity-indexed annuity also may contain one or more market risk benefits (see paragraphs
944-40-55-29A through 55-29D
).
","snippet":"A single premium deferred annuity has a crediting rate that is set at the discretion of the insurance entity. An equity-indexed annuity is a deferred fixed annuity contract with a guaranteed minimum crediting rate plus a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:02511d2e8440f11d5fbba4f6df173fd597ea05395bc7663385ce492a9f3eee50","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-59","para":"55-59","html":"
The contract exchange of a single premium deferred annuity contract for an equity-indexed annuity results in the replacement contract being substantially changed from the replaced contract because the nature of the contract holder's investment return rights differs significantly between the two contracts. The crediting rate of the single premium deferred annuity contract is declared at the discretion of the insurance entity, while the crediting rate on the equity-indexed annuity is contractually determined by reference to a pool of assets, an index, or other specified formula.
","snippet":"The contract exchange of a single premium deferred annuity contract for an equity-indexed annuity results in the replacement contract being substantially changed from the replaced contract because the nature of the contr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:06f3a642622937b2f657bf5bf736496423173ab7ee750e4ff52a37b7c45f9409","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-60","para":"55-60","html":"
A single premium deferred annuity has a crediting rate that is set at the discretion of the insurance entity. A multi-bucket annuity is a general account deferred annuity for which, subject to a contractually specified minimum crediting rate, the interest rate to be credited on the contract holder's account balance is determined based on the returns achieved on a specified category of investments or investment strategy selected by the contract holder. The contract specifies the rights and provisions for the determination of investment return to the contract holder.
","snippet":"A single premium deferred annuity has a crediting rate that is set at the discretion of the insurance entity. A multi-bucket annuity is a general account deferred annuity for which, subject to a contractually specified m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4dc1e5447079afa64a22f345a788d0dba0b27235fe43e3359ccf0a182304994c","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-61","para":"55-61","html":"
The contract exchange of a single premium deferred annuity contract for a multi-bucket annuity results in the replacement contract being substantially changed from the replaced contract because the nature of the investment return rights are different between the two contracts. In the case of the typical single premium deferred annuity, the interest rate is declared at the discretion of the insurance entity whereas, in the case of the multi-bucket annuity, the interest rate is determined by reference to a specific category of assets or investment strategy selected by the contract holder as defined in the contract.
","snippet":"The contract exchange of a single premium deferred annuity contract for a multi-bucket annuity results in the replacement contract being substantially changed from the replaced contract because the nature of the investme…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60061fd547443a76d1a4816deec3a56d5788eebdbc08785f9bb0e59bceb62307","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-62","para":"55-62","html":"
A fixed-interest rate guaranteed investment contract has a stated fixed crediting rate guaranteed for a specified period. An example of a variable-interest rate guaranteed investment contract is a contract with a credited interest rate defined as London Inter Bank Offered Rate (LIBOR) plus a specified spread. Both types of guaranteed investment contracts are classified investment contracts under paragraphs
944-20-15-16 through 15-25
.
","snippet":"A fixed-interest rate guaranteed investment contract has a stated fixed crediting rate guaranteed for a specified period. An example of a variable-interest rate guaranteed investment contract is a contract with a credite…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bd31100eef365ae452d3af81f076d1d0b48d1e5c2e7ace35af2bfe6a049e25f2","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-63","para":"55-63","html":"
The contract exchange of a fixed-rate guaranteed investment contract for a variable-rate guaranteed investment contract results in the replacement contract being substantially changed from the replaced contract because the investment return rights for the determination of the contract holder's investment return are different between the two contracts. In the case of the fixed-rate guaranteed investment contract, the interest rate is fixed and guaranteed whereas, in the case of the variable-interest rate guaranteed investment contract, the investment return to the contract holder is contractually specified to be determined based on the returns achieved on a specified category of investments or tied to a specific index.
","snippet":"The contract exchange of a fixed-rate guaranteed investment contract for a variable-rate guaranteed investment contract results in the replacement contract being substantially changed from the replaced contract because t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fc3ebeabfb71b65701703f3ad8ca07c63b6ed3f29bd718aebe1f73ff614e3e02","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-64","para":"55-64","html":"
A variable annuity is a product offered by an insurance entity in which the contract holder's payments are used to purchase units of a separate account. The contract holder directs the allocation of the account value among various investment allocation alternatives and bears the investment risk. The units may be surrendered for their current value in cash (often less a surrender charge) or applied to purchase annuity income contracts. The insurance entity periodically deducts mortality and expense charges from the account. A common feature in variable annuities is a minimum guaranteed death benefit, with some minimum guaranteed death benefit designs providing more extensive benefits than others.
","snippet":"A variable annuity is a product offered by an insurance entity in which the contract holder's payments are used to purchase units of a separate account. The contract holder directs the allocation of the account value amo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3903a2e45a2e93cea21fc6853032116bc090fb6a3b02db89eb141a1a7bbc9c1f","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-65","para":"55-65","html":"
The contract exchange of a variable annuity with a return of premium death benefit guarantee, that in this example is determined to have a minimal degree of mortality risk (although sufficient to result in classification as an insurance contract), for a variable annuity that contains a ratchet death benefit guarantee, that in this example is determined to be a \"rich\" death benefit, results in the replacement contract being substantially changed from the replaced contract as the change in death benefits substantively changes the degree of mortality risk. The nature of a minimum guaranteed death benefit provision is essentially a combination of mortality and investment events. Although the actual mortality event itself is the same in the return of premium and ratchet guaranteed minimum death benefits (death of the contract holder), the risk has changed because of the combined effects of mortality and investment events. In this instance, the preparer analyzed and concluded that a significant change in the actuarially determined expected mortality costs was indicative of a significant change in the degree of mortality risk. It should be noted that other methods and approaches could have been used to evaluate the change in degree of mortality.
","snippet":"The contract exchange of a variable annuity with a return of premium death benefit guarantee, that in this example is determined to have a minimal degree of mortality risk (although sufficient to result in classification…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f7d5ca149734ebbf5cc402aa6e4d5a0d4c8379e0a24d80ebbf2e86c7044887c","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-66","para":"55-66","html":"
In this guidance, it is assumed that both the variable annuity with the rollup death benefit guarantee and the variable annuity with the ratchet death benefit guarantee offered as an internal replacement are determined to have similar degrees of mortality risk. In this instance, the preparer compared actuarially determined expected mortality costs, and since the costs were similar, it was indicative that the degree of mortality risk was also similar. It should be noted that other methods and approaches could have been used to evaluate the change in degree of mortality. It is also assumed that there is no reunderwriting required for the transaction, no additional deposit required to effect the transaction, and no net decrease in the balance available to the contract holder prior to surrender charges. In this guidance, the replacement results in additional mortality and expense charges due to the enhanced death benefit guarantee not in excess of an amount commensurate with the added benefit. A contract exchange of a variable annuity contract that contains a minimum guaranteed death benefit that is determined to have significant mortality risk with a variable annuity contract that contains another kind of minimum guaranteed death benefit that is determined to have a comparable degree of mortality risk, results in the replacement contract being substantially unchanged from the replaced contract as a result of the following:
  1. a
    The exchange does not result in a significant change in the kind and degree of mortality risk.
  2. b
    The exchange does not change the nature of the contract holder's investment return rights.
  3. c
    No additional deposit or premium is required relating to the variable annuity (the original benefit), and the additional charges for the ratchet death benefit guarantee are not in excess of an amount commensurate with the benefit.
  4. d
    There is no net decrease in the balance available to the contract holder.
  5. e
    There is no change in the participation or dividend features of the contracts.
  6. f
    There is no change to the revenue classification of the replaced contract.
","snippet":"In this guidance, it is assumed that both the variable annuity with the rollup death benefit guarantee and the variable annuity with the ratchet death benefit guarantee offered as an internal replacement are determined t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ce36c66b7e2b29f139d5ab0699c0c3d55808b16bec0fd3c52edb8ed56d24be1","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-67","para":"55-67","html":"
If the modification were achieved through amendment, endorsement, or rider rather than through a contract exchange, the analysis and conclusion would be the same as for the contract exchange because the minimum guaranteed death benefit is an integrated feature.
","snippet":"If the modification were achieved through amendment, endorsement, or rider rather than through a contract exchange, the analysis and conclusion would be the same as for the contract exchange because the minimum guarantee…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:19e0d21aef46afe538d5cb44e7ebffd783a450ad16923c939093db064a999004","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-68","para":"55-68","html":"
A long-term care rider provides that in the event the insured enters a covered facility, the feature will provide a specified fixed payment while the insured is being treated at a covered facility.
","snippet":"A long-term care rider provides that in the event the insured enters a covered facility, the feature will provide a specified fixed payment while the insured is being treated at a covered facility.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fbc7ba37c19008289ca24f1bd970deada214a8e252488e8186bf891a18aede7c","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-69","para":"55-69","html":"
In this guidance, the contract holder exchanges the original variable annuity contract for a new variable annuity contract that contains an long-term care rider. This is a contract exchange in which the replacement contract contains a nonintegrated contract feature, as the long-term care rider is not related to the provisions of the replacement variable annuity contract. This contract exchange results in the base annuity contract being substantially unchanged from the replaced contract as a result of the following:
  1. a
    The modification does not result in a change in the insured event, as there is no significant change in the kind and degree of mortality risk from the replaced contract.
  2. b
    There is no change in the nature of the investment return rights from the replaced contract.
  3. c
    There are no changes in the charges related to the variable annuity (the original benefit), and the additional premium for the long-term care benefit is not in excess of an amount commensurate with the additional insurance coverage obtained.
  4. d
    There is no net decrease in the balance available to the contract holder.
  5. e
    There is no change in the participation or dividend features of the replaced contract.
  6. f
    The modification does not result in a change to either the amortization method or revenue classification of the contract.
","snippet":"In this guidance, the contract holder exchanges the original variable annuity contract for a new variable annuity contract that contains an long-term care rider. This is a contract exchange in which the replacement contr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b5aeab99d4d8bf7e99f1a03f9884a39f47acda9ad99fb3b39948360c756dbdf1","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-70","para":"55-70","html":"
The long-term care rider should be accounted for as a separate contract, as it is a nonintegrated contract feature. This accounting would be the same if the modification had been achieved through the addition of a long-term care rider to the original annuity contract rather than through an exchange.
","snippet":"The long-term care rider should be accounted for as a separate contract, as it is a nonintegrated contract feature. This accounting would be the same if the modification had been achieved through the addition of a long-t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ae918310c42e2fc7257a8c562987b9a299b06303ff566978060f02097511db41","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-71","para":"55-71","html":"
Variable annuities generally have a number of investment allocation alternatives from which the contract holder may select. In the normal course of business, companies modify these elections for a number of reasons, including competition and changes in investment management and distribution relationships. Throughout the life of the contract, the contract holder has the option to select new allocations for the investment of his or her annuity account balance. Generally, the addition of new investment allocation alternatives to variable life insurance or annuity contracts does not result in a substantive change to the original contract because the contractual rights and provisions for the determination of the contract holder's investment return have not changed.
","snippet":"Variable annuities generally have a number of investment allocation alternatives from which the contract holder may select. In the normal course of business, companies modify these elections for a number of reasons, incl…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d59fe030ab910c5c22eab68061b78d99c1b048afb49ec34d4dd8603754110fa8","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-72","para":"55-72","html":"
It is possible that one of the investment allocation alternatives added or elected could be a fixed return option. As long as the contract remains a variable annuity contract and the contract holder retains the right to reallocate amounts to other investment alternatives, neither the addition of the investment alternative nor the contract holder's utilization of that investment alternative would constitute an internal replacement that results in a substantially changed contract. If, however, the contract holder's election of a fixed allocation alternative results in a conversion or partial conversion to a fixed annuity contract or the contract remains a variable annuity contract but the transfer is effectively a conversion or partial conversion because there are substantive restrictions on the contract holder's ability to reallocate amounts to other investment alternatives, the modification would result in a substantially changed contract to the extent of the conversion or substantially restricted balance.
","snippet":"It is possible that one of the investment allocation alternatives added or elected could be a fixed return option. As long as the contract remains a variable annuity contract and the contract holder retains the right to …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bcacc53cab295bf9c4e4524a6a984209ca572692ea5941eb66940f62510291c1","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-73","para":"55-73","html":"
A variable annuity contract is replaced with a variable annuity contract that also provides a guaranteed minimum accumulation benefit, in this example, a 5-percent annual rollup of contract value in 10 years. The contract exchange of a variable annuity for a variable annuity that contains a guaranteed minimum accumulation benefit results in the replacement contract being substantially changed from the replaced contract because the addition of a guaranteed minimum accumulation benefit, an integrated benefit feature, changes the investment return rights of the contract holder by providing a minimum investment return guarantee. The analysis would be the same if the change had been achieved through the addition of a guaranteed minimum accumulation benefit rider. If, however, the contract holder had elected to add a guaranteed minimum accumulation benefit feature that was included in the original contract (and met the specifications in paragraphs
944-30-35-26 through 35-28
), the modification would not be considered an internal replacement.
","snippet":"A variable annuity contract is replaced with a variable annuity contract that also provides a guaranteed minimum accumulation benefit, in this example, a 5-percent annual rollup of contract value in 10 years. The contrac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a145d4eb9a49e5cea9369bd0d50f31d339becd21c329ab6afde380af359f592b","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-74","para":"55-74","html":"
A variable annuity contract is replaced with a variable annuity contract that also provides a guaranteed minimum income benefit, in this guidance, a 5-percent annual rollup of contract value. A guaranteed minimum income benefit, an integrated contract feature, specifies a manner in which an annuitization benefit is determined if the contract holder elects to annuitize. The guaranteed minimum income benefit cannot be withdrawn or net settled. The contract exchange of a variable annuity for a variable annuity that contains a guaranteed minimum income benefit results in the replacement contract being substantially changed from the replaced contract because the addition of a guaranteed minimum income benefit changes the investment return rights of the contract holder, as a minimum investment return provision, via the guaranteed amount for annuitization, has been added to the variable annuity. The analysis would be the same if the change had been achieved through the addition of a guaranteed minimum income benefit rider. If, however, the contract holder had elected to add a guaranteed minimum income benefit feature that was included in the original contract (and met the specifications in paragraphs
944-30-35-26 through 35-28
), the modification would not be considered an internal replacement.
","snippet":"A variable annuity contract is replaced with a variable annuity contract that also provides a guaranteed minimum income benefit, in this guidance, a 5-percent annual rollup of contract value. A guaranteed minimum income …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2b497a71c9a5c437600e5fe2b71a4c8a2fc6ed8912f0dbd32d0663870dcadcea","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-75","para":"55-75","html":"
The insurance entity either replaces deferred annuity contracts with annuity contracts that contain the guaranteed minimum withdrawal benefit feature or the insurance entity adds a guaranteed minimum withdrawal benefit rider to existing inforce business (that is, deferred annuity contracts).
","snippet":"The insurance entity either replaces deferred annuity contracts with annuity contracts that contain the guaranteed minimum withdrawal benefit feature or the insurance entity adds a guaranteed minimum withdrawal benefit r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1623c5d377752562ee658cd46d84346f7ee05779db06006022366adfe21e123e","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},{"citation":"944-30-55-76","para":"55-76","html":"
A variable annuity with a guaranteed minimum withdrawal benefit is classified as an investment contract with a market risk benefit. The contract exchange of a variable annuity for a variable annuity that contains a guaranteed minimum withdrawal benefit results in the replacement contract being substantially changed from the replaced contract because the addition of a guaranteed minimum withdrawal benefit, an integrated contract feature, changes the investment return rights of the contract holder, as a minimum investment return provision, via the guaranteed withdrawal amount, to the variable annuity. The analysis would be the same if the change had been achieved through the addition of a guaranteed minimum withdrawal benefit rider. If, however, the contract holder had elected to add a guaranteed minimum withdrawal benefit feature that was included in the original contract (and met the specifications in paragraph 944-30-35-26), the modification would not be considered an internal replacement.
","snippet":"A variable annuity with a guaranteed minimum withdrawal benefit is classified as an investment contract with a market risk benefit. The contract exchange of a variable annuity for a variable annuity that contains a guara…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:922ca0500f461aad2abb8405aa6857373c17bed5f4188ffb6ab5b2f89ef9c647","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ccd5af0e20cf504124980eec70f0c95f80422c1edfbcc791bd65ce2c37675f3f","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:934e5851f586653b11348c08e15c66406e5998601b2cc6345b1a932c841d026e","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:934e5851f586653b11348c08e15c66406e5998601b2cc6345b1a932c841d026e","downloaded_from":"2026-09-10T02:16:20.762Z","last_downloaded_at":"2026-09-10T02:16:20.762Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479401","source_sha256":"5ea69b0c18af5206046b10990299b17fde20870dd093d81418c0177b75390327"}}