So I'm reading over the current MLC text (Actuarial Mathematics for Life Contingent Risks) and it mentions in the solutions manual:
What are these "acquisition expenses"? A quick Google search leads me to a bunch of things that talk about Deferred Acquisition Cost (DAC). I work at a life-insurance company, so I've heard of this term but don't really know what it is and have heard things such as DAC unlocking, but again, no idea what that is. The literature seems rather dense on this topic; I know for a fact there's a U.S. GAAP book by the SOA (or something like that) which probably covers this material.
Any guidance would be appreciated. :razz: I would like to be enlightened.
Quote:
... life insurance involves significant acquisition expenses. The first premium is used to meet some or all of these expenses. |
What are these "acquisition expenses"? A quick Google search leads me to a bunch of things that talk about Deferred Acquisition Cost (DAC). I work at a life-insurance company, so I've heard of this term but don't really know what it is and have heard things such as DAC unlocking, but again, no idea what that is. The literature seems rather dense on this topic; I know for a fact there's a U.S. GAAP book by the SOA (or something like that) which probably covers this material.
Any guidance would be appreciated. :razz: I would like to be enlightened.
Acquisition Expenses
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