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
part of the Model Uniform Life and Health Insurance Policy Provisions Law giving an insurer a time limit on contesting coverage for preexisting conditions or misrepresentation. This law, ...
Picture of future dividends that the insurance company expects to be allocated to a specific block of policies. The accuracy of this picture depends on the actual future mortality, ...
Same as term Coinsurance: ...
Coverage for an insured firm if its business debtors fail to pay their obligations. The insured firm can be a manufacturer or a service organization but it cannot sell its products or ...
Mathematical premise stating that the greater the number of exposures, (1) the more accurate the prediction; (2) the less the deviation of the actual losses from the expected losses (X - x ...
Individual action or failure to act as a reasonably prudent person would under similar circumstances, resulting in harm to another. Also called negligence. A reasonably prudent person is ...
A ceding company's premium to which the reinsurance premium factor is used to produce the reinsurance premium. ...
Difference between the actual mortality experience and the expected mortality experience. In statistical terms, this is known as the deviation of the actual (X) from the expected (X). The ...
Time interval between the date benefits end under Social Security and the date these benefits resume. For example, survivor benefits are paid only as long as the parent (if less than age ...
Have a question or comment?
We're here to help.