NU Online News Service, Aug. 30, 1:58 p.m. EDT
A change in how companies account for their deferred acquisition costs will probably have a greater impact on life and health insurers than property and casualty carriers and will not affect companies' bottom lines, a new report said.
In its weekly credit outlook, Moody's Rating Service said the U.S. Financial Accounting Standards Board (FASB) issued a draft proposal to change the way insurance companies account for deferred acquisition costs (DAC). These are the costs insurers incur in the acquisition or renewal of insurance contracts.
The previous language gave a broad definition for DAC with the phrase "vary with and are primarily related to" the acquisition of insurance contracts.
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