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Excerpt from ASC 944-40-55-13I
December 31, |
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20X2 |
20X1 |
|||||
PwC observations |
Term life |
Whole life |
Term life |
Whole life |
||
Present value of expected net premiums |
Effect of actual variances from expected experience |
(3) Required – ASC 944-40-50-6b-2 |
XXX |
XXX |
XXX |
XXX |
Present value of expected future policy benefits |
Effect of changes in cash flow assumptions |
(2) Suggested - ASC 944-40-55-13I |
XXX |
XXX |
XXX |
XXX |
Effect of actual variances from expected experience |
(3) Required in –ASC 944-40-50-6b-2 |
XXX |
XXX |
XXX |
XXX |
|
Weighted-average liability duration of the liability for future policy benefits (years) |
(11) Required - ASC 944-40-50-6b-5 |
XX |
XX |
XX |
XX |
December 31, |
||
20X2 |
20X1 |
|
Term life (9) |
$CCC |
$AAA |
Whole life (9) |
DDD |
BBB |
Other |
XXX |
XXX |
Total |
$XXX |
$XXX |
December 31, |
||
20X2 |
20X1 |
|
Term life |
||
Expected future benefit payments |
$XXX |
$XXX |
Expected future gross premiums |
$XXX |
$XXX |
Whole life |
||
Expected future benefit payments |
$XXX |
$XXX |
Expected future gross premiums |
$XXX |
$XXX |
Gross premiums |
Interest accretion |
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December 31, |
December 31, |
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20X2 |
20X1 |
20X0 |
20X2 |
20X1 |
20X0 |
|
Term life |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
Whole life |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
Other |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
Total |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
December 31, |
|||
20X2 |
20X1 |
20X0 |
|
Term life |
|||
Interest accretion rate |
XXX% |
XXX% |
XXX% |
Current discount rate |
XXX% |
XXX% |
XXX% |
Whole life |
|||
Interest accretion rate |
XXX% |
XXX% |
XXX% |
Current discount rate |
XXX% |
XXX% |
XXX% |
Excerpt from ASC 944-40-55-13J
December 31, |
|||||
20X2 |
20X1 |
||||
PwC observations |
Universal life |
Fixed annuity |
Universal life |
Fixed annuity |
|
Policy charges (a) |
(XXX) |
(XXX) |
(XXX) |
(XXX) |
|
Surrenders and withdrawals |
(XXX) |
(XXX) |
(XXX) |
(XXX) |
|
Benefit payments |
(XXX) |
(XXX) |
(XXX) |
(XXX) |
|
Net transfers from(to) separate account |
XXX |
XXX |
XXX |
XXX |
|
Interest credited |
XXX |
XXX |
XXX |
XXX |
|
December 31, |
||
20X2 |
20X1 |
|
Universal life (1)
|
$CCC
|
$AAA
|
Fixed annuity (1)
|
DDD
|
BBB
|
Other
|
XXX
|
XXX
|
Total
|
$XXX
|
$XXX
|
December 31, 20X2 |
||||||
Range of guaranteed minimum crediting rate |
At guaranteed minimum |
1 to 50 basis points above |
51 to 150 basis points above |
Greater than 150 basis points above |
Total |
|
Universal life |
X.XX%–X.XX% |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
X.XX%–X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Greater than X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Total |
$XXX |
$XXX |
$XXX |
$XXX |
$CCC |
|
Fixed annuity |
X.XX%–X.XX% |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
X.XX%–X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Greater than X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Total |
$XXX |
$XXX |
$XXX |
$XXX |
$DDD |
December 31, 20X1 |
||||||
Range of guaranteed minimum crediting rate |
At guaranteed minimum |
1 to 50 basis points above |
51 to 150 basis points above |
Greater than 150 basis points above |
Total |
|
Universal life |
X.XX%–X.XX% |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
X.XX%–X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Greater than X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Total |
$XXX |
$XXX |
$XXX |
$XXX |
$AAA |
|
Fixed annuity |
X.XX%–X.XX% |
$XXX |
$XXX |
$XXX |
$XXX |
$XXX |
X.XX%–X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Greater than X.XX% |
XXX |
XXX |
XXX |
XXX |
XXX |
|
Total |
$XXX |
$XXX |
$XXX |
$XXX |
$BBB |
Excerpt from ASC 944-40-55-13K
December 31, 20X2 |
December 31, 20X1 |
||||
PwC observations |
Variable annuities |
Indexed annuities |
Variable annuities |
Indexed annuities |
|
Balance, beginning of year, before effect of changes in the instrument-specific credit risk
|
(1) Illustrated - ASC 944-40-55-29G
|
XXX |
XXX |
XXX |
XXX |
Actual policyholder behavior different from expected behavior
|
(4) Suggested - ASC 944-40-55-13K
|
XXX |
XXX |
XXX |
XXX |
Effect of changes in future expected policyholder behavior
|
(4) Suggested - ASC 944-40-55-13K
|
XXX |
XXX |
XXX |
XXX |
Effect of changes in other future expected assumptions
|
(4) Suggested - ASC 944-40-55-13K
|
XXX |
XXX |
XXX |
XXX |
Balance, end of year, before effect of changes in the instrument-specific credit risk
|
(1) Suggested - ASC 944-40-55-13K
|
XXX |
XXX |
XXX |
XXX |
Effect of changes in the instrument-specific credit risk
|
(5) Suggested - ASC 944-40-55-13K
|
XXX |
XXX |
XXX |
XXX |
December 31, |
||||||
20X2 |
20X2 |
|||||
Asset |
Liability |
Net |
Asset |
Liability |
Net |
|
Variable annuities (1) |
$XXX |
$XXX |
$GGG |
$XXX |
$XXX |
$GGG |
Indexed annuities (1) |
XXX |
XXX |
$LLL* |
XXX |
$XXX |
$FFF* |
$XXX |
$XXX |
$NNN* |
$XXX |
$XXX |
$MMM* |
December 31, 20X2 |
|||
Variable annuities |
Indexed annuities |
Reinsured MRB – Indexed annuities |
|
Balance, beginning of year
|
$AAA |
$FFF |
$XXX |
Balance, beginning of year, before effect of changes in the instrument-specific credit risk
|
XXX |
XXX |
XXX |
Issuances/Cessions
|
XXX |
XXX |
(XXX) |
Benefit payments/Receipts
|
(XXX) |
(XXX) |
XXX |
Effect of changes in interest rates
|
XXX |
XXX |
(XXX) |
Effect of changes in the instrument-specific credit risk
|
XXX |
XXX |
|
Effect of changes in counterparty credit risk
|
XXX |
||
Balance, end of year
|
$GGG |
$LLL |
$XXX |
PwC observations |
December 31, |
||||
20X2 |
20X1 |
||||
Variable universal life |
Variable annuities |
Variable universal life |
Variable annuities |
||
December 31, |
||
20X2 |
20X1 |
|
Variable universal life (1)
|
$DDD
|
$BBB
|
Variable annuity (1)
|
CCC
|
AAA
|
Other
|
XXX
|
XXX
|
Total
|
$XXX
|
$XXX
|
PwC observations |
As of December 31, 20X2 |
||||||
Whole life |
Universal life |
Variable universal life |
Total |
||||
PwC observations |
As of December 31, 20X1 |
|||||
Whole life |
Universal life |
Variable universal life |
Total |
|||
Disclosure requirement |
Contracts impacted |
ASC reference |
Periods of disclosure |
Nature and amounts of the costs deferred (deferred acquisition and sales inducements)
|
All long-duration contracts
|
Annual periods (1)
|
|
Information about inputs, judgments, assumptions and methods, changes during the period, and effect of those changes on measurement of DAC and DSI
|
All long-duration contracts
|
Annual periods (1)
|
|
Information about inputs, judgments, assumptions and methods, changes during the period, and effect of those changes on measurement of the related asset or liability
|
Traditional, limited-payment contracts and MRBs
|
Annual periods (1)
|
|
Qualitative and quantitative discussion about adverse development that resulted in a charge to current period benefit expense because of net premiums exceeding gross premiums
|
Nonparticipating traditional and limited-payment contracts
|
Both annual and interim periods
|
|
Information about the methodology used when performing PVFP recoverability testing
|
Nonparticipating traditional and limited-payment contracts
|
Annual periods (1)
|
|
Any liability established as a result of PVFP recoverability testing and a description of the factors that led to the impairment
|
Nonparticipating traditional and limited-payment contracts
|
Annual periods (1)
|
|
Whether anticipated investment income was considered when performing PVFP recoverability testing and, if so, the assumption utilized
|
Nonparticipating traditional and limited-payment contracts
|
Annual periods (1)
|
|
Information about the methodology used when performing premium deficiency testing
|
All long-duration contracts, except for nonparticipating traditional and limited-payment contracts (e.g., participating (including closed block) and universal life-type contracts)
|
Annual periods (1)
|
|
Any liability established as a result of a premium deficiency and loss recognition testing and a description of the factors that led to the liability
|
All long-duration contracts, except for nonparticipating traditional and limited-payment contracts (e.g., participating (including closed block) and universal life-type contracts)
|
Annual periods (1)
|
|
Whether anticipated investment income was considered when performing premium deficiency testing and, if so, the assumption utilized
|
All long-duration contracts, except for nonparticipating traditional and limited-payment contracts (e.g., participating (including closed block) and universal life-type contracts)
|
Annual periods (1)
|
|
Results of premium sufficiency or deficiency determined as part of the premium deficiency test in ASC 944-60-25-7 through ASC 944-60-25-9
|
Participating long-duration contracts included in a closed block
|
Annual periods (1)
|
Fair value disclosure requirement |
Related MRB disclosure |
The Level 3 rollforward of beginning and ending balances is required in ASC 820-10-50-2(c), separating the following items:
|
Disaggregated rollforwards, by major category, of the changes in fair value of MRBs are required at each annual and interim period in accordance with ASC 944-40-50-7B (See IG 10.3.1.4).
|
|
The changes in fair value of MRBs are required to be presented in a separate line in the income statement each period, except for the component of the change related to instrument-specific credit risk, which is recognized as a separate line in OCI.
|
|
ASC 944 does not prescribe the specific lines to be included within the disaggregated rollforwards of MRBs, but suggests that insurance entities include the following lines, which generally align to ASC 820 requirements for Level 3 rollforwards:
The other suggested lines in ASC 944-40-55-13K represent the remaining changes in fair value for MRB assets and liabilities. See IG 10.3.1.4 for additional details on the MRB rollforwards.
|
For recurring Level 3 fair value measurements, ASC 820-10-50-2(d) requires the disclosure of:
|
Entities must present changes in fair value of the MRBs through income each period in a separate line, except for the component of fair value representing the change in instrument specific credit risk, which is recognized in OCI in a separate line.
Additionally, MRB disclosure must include disaggregated rollforwards, which should include line items that describe the changes in fair value of the MRBs within the rollforwards. See IG 10.3.1.4 for additional details on the MRB rollforwards.
|
For recurring Level 3 fair value measurements, ASC 820-10-50-2(bbb)(1) requires a description of the valuation technique(s) and the significant unobservable inputs used in measurement.
If the reporting entity has changed its valuation approach or valuation technique, the change and the reason for making it should be disclosed.
(For further discussion, see FSP 20.3.2.1.)
|
ASC 944-40-50-7C requires information about inputs, judgments, assumptions, and methods to be disclosed as well as any changes during the period and effect of those changes on measurement of the related asset or liability be disclosed within the notes.
|
For Level 3 fair value measurements, quantitative information about all significant unobservable inputs used in the fair value measurement, including the range and weighted average of the inputs (the “table of significant unobservable inputs”) must be disclosed in accordance with ASC 820-10-50-2(bbb)(2).
A narrative description of the uncertainty of the fair value measurement at the reporting date from use of the significant unobservable inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement is also required for Level 3 fair value measurements in accordance with ASC 820-10-50-2(g).
|
ASC 944 requires disclosure of inputs, judgments, assumptions, and methods, changes during the period, and the effect of those changes on measurement of the related asset or liability.
ASC 944 also requires a disaggregated rollforwards of MRBs each annual and interim period, which could include lines as suggested in ASC 944-40-55-13K, with quantitative information about the significant unobservable inputs. See IG 10.3.1.4 for additional information on the disaggregated rollforwards of MRBs.
Additional quantitative and qualitative information may be necessary either within the MRB note or other fair value notes to comply with ASC 820-10-50-2(bbb)(2) and ASC 820-10-50-2(g).
|
Disclosure requirement |
ASC reference |
Periods of disclosure |
General nature of the contracts reported in the separate accounts including the extent and terms of any minimum guarantees (e.g., market risk benefits)
|
Annual periods (1)
|
|
Basis of presentation for both separate account assets and liabilities and related separate account activity
|
Annual periods (1)
|
|
Aggregate fair value of assets, separately by major investment asset category, supporting the separate accounts
|
Both annual and interim periods
|
|
Amount of gains and losses recognized on those assets transferred to separate accounts
|
Both annual and interim periods
|
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Select a section below and enter your search term, or to search all click Insurance Contracts