participating policyholders' funds liability

Industry1

1. 944-50Policyholder Dividends944 Financial Services—Insurance

   ASC 944-50 governs how insurance entities account for and report policyholder dividends on participating insurance contracts. For participating contracts other than the long-duration participating life contracts described in 944-20-15-3, dividends are accrued (measured at an estimate of the amount to be paid, or recognized over the premium-paying period using anticipated/illustrated dividend scales), and any policyholders' share of net income that cannot be distributed to stockholders is charged to operations and credited to a participating policyholders' funds liability. For long-duration participating life contracts meeting 944-20-15-3, annual policyholder dividends are expensed based on amounts incurred for policies in force and reported separately in the statement of earnings.