# ASC 944-60-35: Financial Services—Insurance — Premium Deficiency and Loss Recognition — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/944/60/#35-subsequent-measurement) 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): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:368ddc897eb7a1fd8197b3b93b2e22dde978580bf4545969b72298efbb80db23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/944/60/#35-subsequent-measurement) SEC content: no ##### [944-60-35-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:fe4605853b58ce968caa22e0e87a0fb4a4c827a174fc151893c11d7d25ee927f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [450-20-55-17A](https://asc.understandingaccounting.org/asc/450/20/#450-20-55-17A) states that Subtopic 450-20 does not prohibit (and, in fact, requires) accrual of a net loss (that is, a loss in excess of deferred premiums) that probably will be incurred on insurance policies that are [in force](https://asc.understandingaccounting.org/glossary/i/#in-force "Policies and contracts written and recorded on the books of an insurance carrier that are unexpired as of a given date."), provided that the loss can be reasonably estimated. ### Short-Duration Contracts ##### [944-60-35-2](https://asc.understandingaccounting.org/asc/944/60/#944-60-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:b8864d544b06f7685d65cc55c5b8d169cd810d69522e655c4a06e6f7e5ccb149 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [944-60-25-4](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-4) states that a premium deficiency shall be recognized if the sum of expected [claim](https://asc.understandingaccounting.org/glossary/c/#claim "A demand for payment of a policy benefit because of the occurrence of an insured event.") costs and [claim adjustment expenses](https://asc.understandingaccounting.org/glossary/c/#claim-adjustment-expenses "Expenses incurred in the course of investigating and settling claims."), expected [dividends to policyholders](https://asc.understandingaccounting.org/glossary/d/#dividend-to-policyholders "Nonguaranteed amounts distributable to policyholders of participating life insurance contracts and based on actual performance of the insurance entity as determined by the insurer. Under various state insurance laws, dividends are apportioned to policyholders on an equitable basis. The dividend allotted to any contract often is based on the amount that the contract, as one of a class of similar contracts, has contributed to the income available for distribution as dividends. Dividends to policyholders include annual policyholder dividends and terminal dividends."), unamortized [acquisition costs](https://asc.understandingaccounting.org/glossary/a/#acquisition-costs "Costs that are related directly to the successful acquisition of new or renewal insurance contracts."), and [maintenance costs](https://asc.understandingaccounting.org/glossary/m/#maintenance-costs "Costs associated with maintaining records relating to insurance contracts and with the processing of premium collections and commissions.") exceeds related unearned premiums. ##### [944-60-35-3](https://asc.understandingaccounting.org/asc/944/60/#944-60-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:45e3557c0f5034f39f5acbe720ddd69c24f5e0807549d289cd374529d3bbfe9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [944-60-25-5](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-5) states that a premium deficiency shall first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. ##### [944-60-35-4](https://asc.understandingaccounting.org/asc/944/60/#944-60-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:bcb0665d7c8d6023737c0335fd2ae2285a26c544cb434b3214a83347807c8f12 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [944-60-25-6](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-6) states that, if the premium deficiency is greater than unamortized acquisition costs, a liability shall be accrued for the excess deficiency. ### Long-Duration Contracts ##### [944-60-35-5](https://asc.understandingaccounting.org/asc/944/60/#944-60-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:b035911dcbdf4f6ae96f4a92dffcda6cc2a113f769842d95b8742c12262911f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a premium deficiency does occur, future changes in the liability shall be based on the revised assumptions. No loss shall be reported currently if it results in creating future income. The [liability for future policy benefits](https://asc.understandingaccounting.org/glossary/l/#liability-for-future-policy-benefits "An accrued obligation to policyholders that relates to insured events, such as death or disability.") using revised assumptions based on actual and anticipated experience shall be estimated periodically for comparison with the liability for future policy benefits (reduced by the unamortized present value of future profits) at the valuation date. ##### [944-60-35-6](https://asc.understandingaccounting.org/asc/944/60/#944-60-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:59.204Z to 2026-09-10T02:17:59.204Z Record version: sha256:daa794829956cf63fb77e19255d172b335a0b2bef3720a52da09900dcd298a4a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subsection shall not be applied to [investment contracts](https://asc.understandingaccounting.org/glossary/i/#investment-contracts "Long-duration contracts that do not subject the insurance entity to risks arising from policyholder mortality or morbidity.") (see the Investment Contracts Subsections of Subtopic 944-825). Such loss recognition is not permitted.