GAAP Formulas

Section B ILA201-U GAAP Formulas

GAAP Equity

assets - liabilities = paid-in stock + paid-in additional capital + retained earnings

GAAP EOY Equity

BOY equity + comprehensive income + owner transactions

GAAP Owner Transactions

capital contributions - dividends

GAAP Comprehensive Income

net income + other comprehensive income (OCI)

GAAP Net Income

Revenues - Expenses

GAAP Revenues

Premiums + fees + investment income + realized gains

GAAP Expenses

benefits + expenses - realized losses

Significance Ratio

PV(Excess Payments) / PV(Assessments)

NPR(t)

(PV(0) Actual Bens Thru T + PV(0) Expected Bens After T) / (PV(0) Actual GPs Thru T + PV(0) Expected GPs After T)

LFPB(t)

PVFB(t) - NPR(t) * PVGP(t) = (LFPB(t-1) + NPR(t) * GP(t))(1+i) - Ben(t) = LFPB(t-1) + NP(t) + Accretion(t) - Ben(t)

DPL Profit(t)

(1-NPR) * GP(t)

DPL%

PV(0) Profits / PV(0) BOYIF

DPL(t)

DPL% * PV(t)BOYIF - PV(t)Profit = (DPL(t-1) + Profit(t))(1+i) - DPL% * BOYIF(t-1)

UPPEA(t)

.90 * CumulativeSurplus(t) * CumulativePHDivs(t)

LFPB Total Benefit Expense

Actual Benefits Incurred + Remeasurement Loss + Change in Reserve

UL DB Option A

max(Face, PHAB * 7702 Factor)

UL DB Option B

max(Face + PHAB, PHAB * 7702 factor)

UL DB Option C

max(Face + sumof(premiums) - sumof(withdrawals), PHAB * 7702 factor)

UL NAR(t)

(DB(t) / (1+ig)^(1/12)) - (PHAB(t-1) + Prem(t)(1-PremLoad%(t)) - ExpLoad(t)) = Discounted Face - BOM PHAB before COI and interest

UL Credited Int

PHAB After COI * ((1+ic)^(1/12) - 1)

DIG-B 30 IRR

IRR = (GMMV / Host(0))^(1/T) −1

DA Deposit Ratio

PV(Bonus) / PV(PHAB)

DA SIL(t)

(SIL(t-1) + DepositRatio * PHAB(t)) - Bonus(t)

DA CF based earnings

Gross Premiums + Net Investment Income − (DBs + SBs + IncrLFPB + Non-Def Exp + DACAmort)

DA GAAP Net Income

Net Investment Income + Surrender Charges − (DBs Paid in Excess of PHAB + Credited Interest + Non-Def Exp + DAC Amort)

Short Duration DAC(t)

DeferrableCosts * Unearned Prem / Total Prem

DAC TrueUp(t)

(OrigBOYIF(t) - ActualBOYIF(t)) / OrigBOYIF(t) * OrigDAC(t)

Long Duration DAC(t)

DAC(t-1) + Capitalization(t) - DACAmort(t) - TrueUp(t)