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A long-duration insurance contract is one that generally is not subject to unilateral changes in its provisions and either provides insurance coverage or a return for an extended period. Long-duration insurance contracts are principally life, annuity, non-cancellable or guaranteed renewable accident and health, and disability.
This chapter focuses on the accounting for long-duration contracts that in whole or in part fall within the following classifications:
  • Non-participating traditional life insurance contracts
  • Limited payment contracts
  • Universal life-type contracts
  • Investment contracts
  • Market risk benefits
  • Derivatives and embedded derivatives in insurance and investment contracts
  • Additional liabilities for annuitization, death or other insurance benefits

Refer to IG 2.4 for the framework for determining the classification of long-duration contracts.
This chapter also addresses policyholder dividends and the concept of “shadow” adjustments. See IG 5.9 and IG 5.10 for further information, respectively.

PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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