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SFFAS No. 51, Insurance Programs

July 2018 IRC Meeting

Brian Casto

July 12, 2018 

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 Phase 1 of FASAB’s ‘Risk Assumed’ Project

 Effective September 30, 2018 (FY 2019)

 Rescinds SFFAS 5, Accounting for Liabilities of 

The Federal Government (Paragraphs 97-121)

 Affects the reporting of Contingent Losses from 

insurance activities

 Provides consistent reporting standards for the 

reporting of liabilities for losses incurred/claimed

 Clearly defines insurance terms and the extent of 

expected losses 

SFFAS No. 51 - Insurance Programs
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• Exchange Transaction 

Insurance Programs Other 

Than Life Insurance

• NonExchange Transaction 

Insurance Programs

• Life Insurance Programs

SFFAS 51 

creates 

three groups 

of insurance 

based on 

the type of 

revenue 

collected:

Insurance Groups

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Current Insurance Accounting

Insurance 

Liabilities and 

Losses reported 

are not 

comparable 

across agencies

Uncertainty 

remains about 

estimated 

losses

Significant risks 

assumed may not 

be fully reported 

or disclosed

No clear 

definitions for 

insurance 

programs and 

terms
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 Collect premiums to cover risks of loss from 

adverse events other than an individual’s death

 ANY exchange revenue and not Life Insurance = 

Exchange Transaction Other Than Life

 Premium Revenue & Unearned Premiums

o Premiums = Earned over coverage period

 Unpaid Claim Liability

o Claims reported but not paid & Claims IBNR

 Estimates of Losses on Remaining Coverage

o Estimated future cash flows from adverse events

Exchange Transaction Other Than Life

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 Collect funds on demand and/or receive 

appropriations

 ANY exchange revenue and not Life Insurance = 

Exchange Transaction Other Than Life

 Unpaid Claim Liability

o Reported at estimated settlement amount

o Adjustments should be recognized as part of Claims 

Adjustment Expense (CAE)

Nonexchange Transaction
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 Collect premiums to cover the risk of loss from 

death of individuals

 ANY exchange revenue and not Life Insurance = 

Exchange Transaction Other Than Life

 Premium Revenue 

o Premiums = Recognized when due

 Unpaid Claim Liability

o Claims reported but not paid/Claims IBNR

 Future Policy Benefit Liability

o Expected present value of future claims to be 

disbursed, less expected PV of future premiums

Life Insurance Transaction

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Insurance Accounting USSGL Map
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Contact Information

Brian Casto

General Ledger and Advisory Branch

Bureau of the Fiscal Service

(304) 480-7018

brian.casto@fiscal.treasury.gov

Chris Beck, Manager

General Ledger and Advisory Branch

Bureau of the Fiscal Service

(304) 480-7122

Christopher.beck@fiscal.treasury.gov

Andrew Morris

General Ledger and Advisory Branch

Bureau of the Fiscal Service

(304) 480-8463

andrew.morris@fiscal.treasury.gov

Amy Soul

Consolidated Financial Reporting Branch

Bureau of the Fiscal Service

(304) 480-7564

amy.soul@fiscal.treasury.gov