issuer disclosure

Liabilities1

1. 470-944Financial Services—Insurance470 Debt

   This subtopic governs how an insurance entity that issues surplus notes (also called certificates of contribution, surplus debentures, or capital notes) accounts for them under GAAP. The core rule is that surplus notes are debt, not equity: they are presented as liabilities and interest is accrued over the note's life even though the domiciliary state insurance commissioner must approve each principal and interest payment (470-944-25-1, 35-1, 45-1).