Deferred Acquisition Costs

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Deferred Acquisition Costs

In insurance, an expense to a customer that an insurance company initially pays, but recoups the funds from the customer gradually over the life of the insurance policy or other contract.
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There was marginal decline in equity in view of adjustments for IFRS-9, increase of goodwill acquisition of a new subsidiary and deferred acquisition cost. The institutional structure of the insurance sector under the regulatory jurisdiction of QCB remained unchanged during 2018.
The original Brady bill also would have changed how life insurers account for "deferred acquisition cost" (DAC) expenses, or the spending associated with bringing in new life and annuity business, such as marketing, underwriting, and paying agent sales commissions.
Booth writes in a commentary published by Seeking Alpha that the net loss was partly due to a routine deferred acquisition cost (DAC) adjustment; that the company's core mortgage insurance units in Australia, Canada and the United States did well; that ending new life and fixed annuity sales should help cut costs without having much effect on revenue; and that the LTCI unit did well.
Insurance companies also pay premium taxes, state and federal income tax, capital gains tax, sales tax, and deferred acquisition cost taxes on reserves.
The current version also includes a provision that would change how a life insurer handles "deferred acquisition cost" (DAC) expenses, or the cost of acquiring life insurance customers, annuity customers, and purchasers of noncancelable accident and health contracts.
Deferred Acquisition Costs: Under the framework described by the Discussion Paper, there will be no separate deferred acquisition cost (DAC) asset to account for the investment the insurer makes in the customer relationship.
Depressed financial markets, catastrophic events, rising costs of guarantees and options, deferred acquisition cost write-offs, concerns over reinsurance security and corporate scandals in the financial community have taken their toll on the insurance industry.
ING Re, the report continues, will record an after-tax deferred acquisition cost write-off in third quarter 2004 for mortality mispricing.
Completion of the final instalment follows a series of staged payments made by Bass to Cooper under the $2.27 million acquisition transaction and agreed schedule for deferred acquisition costs.
Surplus growth in 2018 was significantly impacted by an accounting change approved by the Florida regulator, which allowed for deferred acquisition costs to be reduced by a portion of unearned attorney-in-fact fees, due to their related party status.
The second quarter of 2016 included severance charges of USD 16.9 million (USD 0.13 per diluted share) and a charge of USD 5.9 million (USD 0.04 per diluted share) for the accelerated amortization of deferred acquisition costs associated with the share class conversion in 2016.
calculation of deferred acquisition costs, unearned revenue reserves and certain reserves on interest sensitive products