formal determination of insolvency

Liabilities1

1. 405-30Insurance-Related Assessments405 Liabilities

   ASC 405-30 governs when and how entities—insurers and self-insurers alike—accrue liabilities for statutory or regulatory insurance-related assessments such as state guaranty-fund assessments, insurance department administrative assessments, and workers' compensation second-injury fund assessments. A liability is recognized only when an assessment is probable, the obligating event has occurred by the balance sheet date, and the amount is reasonably estimable (405-30-25-1); the obligating event differs by assessment mechanism (retrospective vs. prospective vs. prefunded premium-based, and loss-based). Related recoveries via premium tax offsets or policy surcharges are recognized as assets when probable (405-30-25-8), but recoveries expected only through future premium rate structures are not (405-30-25-10).