Generally Accepted Accounting Principles (gaap)

Definition of "Generally accepted accounting principles (gaap)"

Colby & Michele  Myers real estate agent

Written by

Colby & Michele Myerselite badge icon

Treehouse Realty

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.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Same as term Convertible Term Life Insurance: coverage that can be converted into permanent insurance regardless of an insured's physical condition and without a medical examination. The ...

Compensation payable to the owner of a ship detained for reasons beyond his or her control who incurs a loss of earnings because of the delay. Detainment can be caused by a delay in the ...

Amount expressed as a liability on the insurance company's balance sheet for benefits owed to policy owners. These reserves must be maintained according to strict actuarial formulas as they ...

Rule that prohibits the introduction into a court of law of any oral or written agreement that contradicts the final written agreement. For example, an insurance contract containing clauses ...

Means of selling and servicing property and casualty insurance through agents who represent different companies. The agents own the records of the policies they sell. ...

Agreement by an insurance company to pay a predetermined amount, as indicated in an insurance policy, should a loss occur. ...

Coverage for legal liability resulting from damage or destruction of the bailor's property while under the bailee's temporary care, custody, and control. Includes property on or in transit ...

Provisions added to an original insurance policy that alter or modify benefits and coverages of the contract. For example, a homeowners insurance policy can be endorsed to cover a ...

Break in commercial activities due to the occurrence of a peril. Coverage against business interruption by various named perils can be obtained through insurance. ...

Popular Insurance Questions