Summary of Statement No. 120

Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration Participating Contracts—an amendment of FASB Statements No. 60, 97, and 113 and Interpretation No. 40 (Issued 1/95)

Summary

This Statement extends the requirements of FASB Statements No. 60, Accounting and Reporting by Insurance Enterprises, No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, and No. 113, Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts, to mutual life insurance enterprises, assessment enterprises, and fraternal benefit societies (all of which are hereafter referred to as mutual life insurance enterprises). The AICPA has established accounting for certain participating life insurance contracts of mutual life insurance enterprises in its Statement of Position 95-1, Accounting for Certain Insurance Activities of Mutual Life Insurance Enterprises, that should be applied to those contracts that meet the conditions in this Statement. This Statement also permits stock life insurance enterprises to apply the provisions of the SOP to participating life insurance contracts that meet the conditions in this Statement. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 1995.

This Statement also amends FASB Interpretation No. 40, Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises, to defer the effective date of the general provisions of that Interpretation to fiscal years beginning after December 15, 1995. This Statement does not change the disclosure and other transition provisions of Interpretation 40.