# ASC 944-60: Financial Services—Insurance — Premium Deficiency and Loss Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/944/60/) 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): 2026-09-10T02:17:42.336Z to 2026-09-10T02:18:05.734Z Record version: sha256:063e2bd13473e5ffdbd3be387d2861f45c09e19c69faefa9c5c207b89fa331ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60: Financial Services—Insurance — Premium Deficiency and Loss Recognition ### Machine-generated study aids ```json { "summary": "ASC 944-60 tells insurance entities when and how to recognize a premium deficiency (loss recognition) on insurance contracts, with separate guidance for short-duration and long-duration contracts. For short-duration contracts, a deficiency exists when expected claim costs and claim adjustment expenses, expected policyholder dividends, unamortized acquisition costs, and maintenance costs exceed related unearned premiums; it is recognized first by writing off unamortized acquisition costs and then by accruing a liability for any excess (944-60-25-4 through 25-6). For long-duration contracts, if actual experience shows existing contract liabilities plus the present value of future gross premiums will not cover future benefits and settlement costs and recover unamortized present value of future profits, the deficiency is charged to income by reducing the present value of future profits or increasing the liability for future policy benefits (944-60-25-7 through 25-8).", "key_points": [ "Contracts must be grouped consistent with the entity's manner of acquiring, servicing, and measuring the profitability of its insurance contracts to determine whether a premium deficiency exists (944-60-25-3).", "A premium deficiency on short-duration contracts is recognized when expected claim costs and claim adjustment expenses, expected dividends to policyholders, unamortized acquisition costs, and maintenance costs exceed related unearned premiums (944-60-25-4).", "The deficiency is recognized first by charging unamortized acquisition costs to expense, and only if the deficiency exceeds those costs is a liability accrued for the excess (944-60-25-5 through 25-6).", "For long-duration contracts, revised assumptions based on actual and anticipated experience are used to remeasure the liability as the PV of future benefits and settlement costs minus the PV of future gross premiums; the deficiency is that amount minus the existing liability reduced by unamortized present value of future profits (944-60-30-1 through 30-2).", "Once a deficiency occurs, future changes in the liability are based on the revised assumptions, and no loss may be reported currently if it results in creating future income (944-60-35-5).", "A deficiency must at a minimum be recognized when an entire line of business is deficient in the aggregate; if profits would be recognized in early years and losses in later years, the liability is increased to offset the later-year losses (944-60-25-9).", "Disclosures include whether anticipated investment income was considered in short-duration premium deficiency testing (944-60-50-1) and, for long-duration loss recognition, the liability amount and factors causing it, the methodology used, and the anticipated investment income assumption (944-60-50-2); loss recognition is not permitted for investment contracts (944-60-35-6)." ], "categories": [ "Industry-specific", "Impairment", "Subsequent measurement", "Disclosure" ], "audience_level": "advanced", "student_note": "Premium deficiency testing is the insurance analog of a loss contract accrual: it is done at the contract-grouping (often line-of-business) level, not contract by contract. A common misunderstanding is jumping straight to a liability — for short-duration contracts you must first write off unamortized acquisition costs, and note that long-duration traditional and limited-payment contracts under 944-40-25-11 are scoped out of this testing.", "related_topics": [ "944-40", "944-30", "944-20", "944-825", "450-20", "944-805" ], "key_concepts": [ "premium deficiency", "loss recognition", "short-duration contracts", "long-duration contracts", "unamortized acquisition costs", "liability for future policy benefits", "present value of future profits", "anticipated investment income" ] } ``` Source downloaded (UTC): 2026-09-10T02:17:42.336Z to 2026-09-10T02:17:42.336Z Record version: sha256:26315cd0cdce628908c5f919cbf74e8e705996cd9098656d5ffda86b0aa405ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/944/60/#00-status) SEC content: no ##### [944-60-00-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:42.336Z to 2026-09-10T02:17:42.336Z Record version: sha256:a3dc60c40bdcc4e1f949b956ecf4b4ced65d5444f64d12893573fc298e057a81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Acquisition CostsAmendedAccounting Standards Update No. 2010-2610/13/2010
Dividends to PolicyholdersAddedAccounting Standards Update No. 2014-0603/14/2014
944-60-15-5AmendedAccounting Standards Update No. 2018-1208/15/2018
944-60-25-4AmendedAccounting Standards Update No. 2014-0603/14/2014
944-60-25-7AmendedAccounting Standards Update No. 2018-1208/15/2018
944-60-25-8AmendedAccounting Standards Update No. 2018-1208/15/2018
944-60-30-1AmendedAccounting Standards Update No. 2018-1208/15/2018
944-60-30-2AmendedAccounting Standards Update No. 2018-1208/15/2018
944-60-35-2AmendedAccounting Standards Update No. 2014-0603/14/2014
944-60-35-5AmendedAccounting Standards Update No. 2018-1208/15/2018
944-60-50-2AmendedAccounting Standards Update No. 2025-1112/08/2025
944-60-50-2AddedAccounting Standards Update No. 2018-1208/15/2018
Source downloaded (UTC): 2026-09-10T02:17:44.085Z to 2026-09-10T02:17:44.085Z Record version: sha256:e2afc33a4033383196d9ffe1b1a45275ec7aa3631df6e947929884ad8a8ac42a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/944/60/#05-overview-and-background) SEC content: no ##### [944-60-05-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:44.085Z to 2026-09-10T02:17:44.085Z Record version: sha256:2adbccf454116588125bf5994e668dd62f92646c8c835e924d064f88b1a4805c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to insurance entities on accounting for and financial reporting of a premium deficiency on insurance contracts. The guidance in this Subtopic is presented in the following three Subsections: 1. a General 2. b Short-Duration Contracts 3. c Long-Duration Contracts. ### Short-Duration Contracts ##### [944-60-05-2](https://asc.understandingaccounting.org/asc/944/60/#944-60-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:44.085Z to 2026-09-10T02:17:44.085Z Record version: sha256:262a9c8295d80efe44b0c094f5bd04fc61a12351f175ac14a976a20f912df751 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Short-Duration Contracts Subsections of this Subtopic provide guidance to insurance entities on accounting for and financial reporting of a premium deficiency on short-duration insurance contracts. ### Long-Duration Contracts ##### [944-60-05-3](https://asc.understandingaccounting.org/asc/944/60/#944-60-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:44.085Z to 2026-09-10T02:17:44.085Z Record version: sha256:55506d92b41a34309ca8e88da652932f1701253e3f778b60ab4f5ad82f733654 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Long-Duration Contracts Subsections of this Subtopic provide guidance to insurance entities on accounting for and financial reporting of a premium deficiency on long-duration insurance contracts. Source downloaded (UTC): 2026-09-10T02:17:46.601Z to 2026-09-10T02:17:46.601Z Record version: sha256:2cba22fc143dff9d7c5f21919de3cbc97dad948c9d662665134ecdbb20293897 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/944/60/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [944-60-15-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:46.601Z to 2026-09-10T02:17:46.601Z Record version: sha256:c4bda5470618244ea82852613c22477914637af66ee13cec657ab8bc3330f564 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15. ### Short-Duration Contracts ##### [944-60-15-2](https://asc.understandingaccounting.org/asc/944/60/#944-60-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:46.601Z to 2026-09-10T02:17:46.601Z Record version: sha256:706d3ea821f05e09cf6d581b786756f0350f70a90cf04e2c80dcc0d011379a3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Short-Duration Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Section, with specific instrument qualifications noted below. #### Instruments ##### [944-60-15-3](https://asc.understandingaccounting.org/asc/944/60/#944-60-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:46.601Z to 2026-09-10T02:17:46.601Z Record version: sha256:537b840a0e5a43bb5923cc05bd5140213117dec916c1bdc03beb348f4eebc7df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Short-Duration Contracts Subsections of this Subtopic applies only to short-duration contracts. See the [Short-Duration Contracts Subsection](https://asc.understandingaccounting.org/asc/944/20/#15-scope-and-scope-exceptions) of Section 944-20-15 for a discussion of what constitutes a short-duration contract. ### Long-Duration Contracts #### Overall Guidance ##### [944-60-15-4](https://asc.understandingaccounting.org/asc/944/60/#944-60-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:46.601Z to 2026-09-10T02:17:46.601Z Record version: sha256:6d164b8bd73184f81302e3466c6cea4065ab2b78c55ca07e9adf6f1b8685ba9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Long-Duration Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Section, with specific instrument qualifications noted below. #### Instruments ##### [944-60-15-5](https://asc.understandingaccounting.org/asc/944/60/#944-60-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:46.601Z to 2026-09-10T02:17:46.601Z Record version: sha256:a7803e2a9dc91e7b6f018109310e6692f839afd34ed16dd5ac518e9d7e64e384 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Long-Duration Contracts Subsections of this Subtopic applies to long-duration contracts, except for the liability for future policy benefits for traditional and limited-payment contracts subject to the guidance in paragraph [944-40-25-11](https://asc.understandingaccounting.org/asc/944/40/#944-40-25-11). Paragraph [944-30-35-63](https://asc.understandingaccounting.org/asc/944/30/#944-30-35-63) specifies that the present value of future profits relating to insurance (including traditional and limited-payment) and reinsurance contracts acquired is subject to premium deficiency testing in accordance with the provisions of this Subtopic (see paragraph [944-805-35-3](https://asc.understandingaccounting.org/asc/805/944/#805-944-35-3)). See the [Long-Duration Contracts Subsection](https://asc.understandingaccounting.org/asc/944/20/#15-scope-and-scope-exceptions) of Section 944-20-15 for a discussion of what constitutes a long-duration contract. Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:0235e67796427bb9192973d86208704526a18244c29786c970005af2c55fb4dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/944/60/#25-recognition) SEC content: no ##### [944-60-25-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:eb4d3ce3ceeb9761797303c493c1d6703b6634d3e5780f38d9a4b60ab022a215 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. ##### [944-60-25-2](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:1efe338ac123e8bc4cd987d99c4cab2de8ac7335ee2e926d95c177d87ca9aa1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") loss on insurance contracts exists if there is a premium deficiency relating to short-duration or long-duration contracts. ##### [944-60-25-3](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:6a872ff80662a5fa59842f8d286acc6a355005a61395964efdee94dfd4b4762d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Insurance contracts shall be grouped consistent with the entity's manner of acquiring, servicing, and measuring the profitability of its insurance contracts to determine if a premium deficiency exists. ### Short-Duration Contracts ##### [944-60-25-4](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:eb4305c75e11cee1644eb6200f0449aad16e2c2e345150bd0a593614b9c8f330 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [944-60-25-5](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:581cd94ff2195f06a54f40dc3c4c7fa46e47e48c9af24e07b5c1e08d3ec55b04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A premium deficiency shall first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. ##### [944-60-25-6](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:0b9c43f025c9d60a4f9cb25a0e4ed1cf71336ecb7536c97eaae142b5d7cbdcca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the premium deficiency is greater than unamortized acquisition costs, a liability shall be accrued for the excess deficiency. ### Long-Duration Contracts ##### [944-60-25-7](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:cc2af3f187b6297aca86a57e5a74cb1c24023317fd99ad4a3b73148a8c1927e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Original policy benefit assumptions for certain long-duration contracts ordinarily continue to be used during the periods in which 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.") is accrued under Subtopic 944-40. However, actual experience with respect to investment yields, [mortality](https://asc.understandingaccounting.org/glossary/m/#mortality "The relative incidence of death in a given time or place."), [morbidity](https://asc.understandingaccounting.org/glossary/m/#morbidity "The relative incidence of disability due to disease or physical impairment."), terminations, or expenses may indicate that [existing contract](https://asc.understandingaccounting.org/glossary/e/#existing-contract "A contract that is currently held by the contract holder and excludes nonintegrated contract features.") liabilities, together with the present value of future gross premiums, will not be sufficient to do both of the following: 1. a Cover the present value of future benefits to be paid to or on behalf of policyholders and settlement costs relating to a block of long-duration contracts 2. b Recover unamortized present value of future profits. ##### [944-60-25-8](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:24abe308ee356c5151b0695aba8cbdba4195037596cf1eea871934928b3d8a3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The premium deficiency shall be recognized by a charge to income and either of the following: 1. a A reduction of unamortized present value of future profits 2. b An increase in the liability for future policy benefits. ##### [944-60-25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:52.429Z to 2026-09-10T02:17:52.429Z Record version: sha256:c657565222269fb43ef5e82b3a15d4d6a8155aae5537c53ed452adb075085dea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A premium deficiency, at a minimum, shall be recognized if the aggregate liability on an entire line of business is deficient. In some instances, the liability on a particular line of business may not be deficient in the aggregate, but circumstances may be such that profits would be recognized in early years and losses in later years. In those situations, the liability shall be increased by an amount necessary to offset losses that would be recognized in later years. Source downloaded (UTC): 2026-09-10T02:17:55.154Z to 2026-09-10T02:17:55.154Z Record version: sha256:6dac3f7eb39a049ad73601509b61680f2931726f016cbfafba82b0fc59c3da57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/944/60/#30-initial-measurement) SEC content: no ### Long-Duration Contracts ##### [944-60-30-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:55.154Z to 2026-09-10T02:17:55.154Z Record version: sha256:cb5e197fb6e5393973039eba39aed540f6edd3ebcc8474794ee09a5175296257 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the conditions in paragraph [944-60-25-7](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) exist, an entity shall determine 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 as the remainder of the present value of future payments for benefits and related settlement costs (determined using revised assumptions based on actual and anticipated experience) minus the present value of future gross premiums (also determined using revised assumptions based on actual and anticipated experience). ##### [944-60-30-2](https://asc.understandingaccounting.org/asc/944/60/#944-60-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:55.154Z to 2026-09-10T02:17:55.154Z Record version: sha256:731ccd483c1edca48a71622a8490cd76d88f2759536b96e2b672127c22ee0bba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A premium deficiency shall then be determined as the liability measured in paragraph [944-60-30-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-30-1)minus the liability for future policy benefits at the valuation date, reduced by the unamortized present value of future profits. 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. Source downloaded (UTC): 2026-09-10T02:18:01.966Z to 2026-09-10T02:18:01.966Z Record version: sha256:d3d3e7377bc855d298be8447c4e0c3b27648daa97479c9b48406507017f60c15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-60-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/944/60/#50-disclosure) SEC content: no ### Short-Duration Contracts ##### [944-60-50-1](https://asc.understandingaccounting.org/asc/944/60/#944-60-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:01.966Z to 2026-09-10T02:18:01.966Z Record version: sha256:e32018304669b5161b6ce7ca2a288c26bac9ad9d9ea41dc89c8812ab2c89cdc7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An insurance entity shall disclose in its financial statements whether it considers anticipated investment income in determining if a premium deficiency relating to short-duration contracts exists. ### Long-Duration Contracts ##### [944-60-50-2](https://asc.understandingaccounting.org/asc/944/60/#944-60-50-2) Pending content: yes Source downloaded (UTC): 2026-09-10T02:18:01.966Z to 2026-09-10T02:18:01.966Z Record version: sha256:ab47f572fcb5a9d8e9eed6c5f5282de6c05bde812aad768bddb73273f487c3de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For annual reporting periods, and to the extent required by Topic 270 on interim reporting, an insurance entity shall disclose the following: 1. a The amount of a liability that is established as a result of a premium deficiency and loss recognition testing determined in accordance with paragraphs [944-60-25-7 through 25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) and a description of the factors that led to the establishment of the liability 2. b Information about the methodology used when performing premium deficiency testing in accordance with paragraphs [944-60-25-7 through 25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) 3. c Whether the entity considered anticipated investment income when performing premium deficiency testing in accordance with paragraphs [944-60-25-7 through 25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) and, if so, what that assumption was. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For interim and annual reporting periods, an insurance entity shall disclose the following: 1. a The amount of a liability that is established as a result of a premium deficiency and loss recognition testing determined in accordance with paragraphs [944-60-25-7 through 25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) and a description of the factors that led to the establishment of the liability 2. b Information about the methodology used when performing premium deficiency testing in accordance with paragraphs [944-60-25-7 through 25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) 3. c Whether the entity considered anticipated investment income when performing premium deficiency testing in accordance with paragraphs [944-60-25-7 through 25-9](https://asc.understandingaccounting.org/asc/944/60/#944-60-25-7) and, if so, what that assumption was.