Generally Accepted Accounting Principles (gaap)
Definition of "Generally accepted accounting principles (gaap)"
Type of accounting method, in life insurance, designed to match revenues and expenses of an insurer according to principles designed by the Financial Accounting Standards Board and the Audit Guide for Stock Life Insurance Companies published by the American Institute of CPAs. For example, under GAAP, acquisition expenses (costs of placing insurance on a company's books such as administrative expenses and agent commissions) are recognized in the same proportion that premium income is recognized over the premium paying period, with losses subtracted from premium and investment income as they occur.
Popular Insurance Terms
Smallest face amount of life insurance that an insurance company will write on any one person. ...
Coverage in the event an insured's automobile is damaged, destroyed, or lost through fire, theft, vandalism, malicious mischief, collision, or windstorm. There are two kinds of property ...
Premium paid before the due date. For example, a premium is due on July 1, 2000, but the insured actually makes the premium payment on January 1, 2000, receiving a premium discount. ...
State plans that provide health insurance coverage for those who are unable to purchase medical insurance. Coverage is provided by a specially formed nonprofit-making pool comprised of all ...
Legal procedure through which a court determines the rightful claimant (of two or more claimants making the same claim) against a third party. Insurance companies use interpleader if claims ...
Reinsurance marketplace modeled after Lloyd's of London. Like Lloyd's, the New York Insurance Exchange is a market for hard-to-place risks and for the placement of excess or surplus lines. ...
Provision in a marine insurance policy in which agreement has been reached between the insured and the insurance company concerning the worth of the property that is to be covered under the ...
Bonds that are less than investment grade plus the bonds that are in or approaching default, which comprise part of the insurance company's investment bond portfolio. ...
State laws that prohibit for an unreasonable period of time the accumulation of income under the option modes of settlement of a life insurance policy unless the beneficiary of the policy ...
Have a question or comment?
We're here to help.