SEC Comment Letter for AFLAC INC (AFL) (CIK 0000004977) (AFL) — Jun 10, 2016
AFLAC INC (AFL) (CIK 0000004977)
Date: June 10, 2016 · CIK: 0000004977 · Accession: 0000000000-16-080147
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-07434
Letter
Mail Stop 4720 June 10, 2016 Via E -mail Frederick J. Crawford Executive Vice President and Chief Financial Officer Aflac Incorporated 32 Wynnton Road Columbus, Georgia 31999
Re: Aflac Incorporated Form 10-K for the Fis cal Year Ended December 31, 2015 Filed February 25, 2016 File No. 001-07434
Dear Mr. Crawford :
We have reviewed your May 11, 2016 response to our comment letter and have the following comments. In some of our comments , we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe a commen t applies to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our reference to a prior comment is to the comment in our April 28, 2016 letter .
Consolidated Financial Statements Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Insurance Revenue and Expense Recognition, page 90
1. We acknowledge your response to our prior comment 1. It is our understanding that you classify your supplemental health and life insurance policies as long -duration contracts. Please further revise your proposed health and life accou nting policy disclosures to clarify; What you mean when you state that insurance premiums are recognized “ratably” over the life of the premium payment periods and how this policy complies with ASC 944-605-25-3 which states that premiums should be recogn ized over the premium payment periods when due from policy holders; and
Frederick J. Crawford Aflac Incorporated June 10, 2016 Page 2
Your policy for unlocking assumptions that are established at the time the contract is issued.
2. In addition, revise your accounting policy for deferred policy acquisition costs and/or policy liabilities to include t he types of transactions that result in internal replacements (substantially unchanged and changed) . For example, we note your disclosure on page 59 that you add riders to older policies to help offset the effect of negative interest spreads. We are unclear whether you consider this an internal replacement and if so, whether it results in a substantially unchanged or changed contract.
You may contact Ibolya Ignat , Senior Staff Accountant, at (202) 551 -3636 or Sharon Blume, Accounting Branch Chief at (202) 551 -3474 if you have any questions regarding the comment. In this regard, do not hesitate to contact me at (202) 551 -3679 .
Sincerely,
/s/ Jim B. Rosenberg
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Mail Stop 4720 June 10, 2016 Via E -mail Frederick J. Crawford Executive Vice President and Chief Financial Officer Aflac Incorporated 32 Wynnton Road Columbus, Georgia 31999 Re: Aflac Incorporated Form 10-K for the Fis cal Year Ended December 31, 2015 Filed February 25, 2016 File No. 001-07434 Dear Mr. Crawford : We have reviewed your May 11, 2016 response to our comment letter and have the following comments. In some of our comments , we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe a commen t applies to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our reference to a prior comment is to the comment in our April 28, 2016 letter . Consolidated Financial Statements Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Insurance Revenue and Expense Recognition, page 90 1. We acknowledge your response to our prior comment 1. It is our understanding that you classify your supplemental health and life insurance policies as long -duration contracts. Please further revise your proposed health and life accou nting policy disclosures to clarify; What you mean when you state that insurance premiums are recognized “ratably” over the life of the premium payment periods and how this policy complies with ASC 944-605-25-3 which states that premiums should be recogn ized over the premium payment periods when due from policy holders; and Frederick J. Crawford Aflac Incorporated June 10, 2016 Page 2 Your policy for unlocking assumptions that are established at the time the contract is issued. 2. In addition, revise your accounting policy for deferred policy acquisition costs and/or policy liabilities to include t he types of transactions that result in internal replacements (substantially unchanged and changed) . For example, we note your disclosure on page 59 that you add riders to older policies to help offset the effect of negative interest spreads. We are unclear whether you consider this an internal replacement and if so, whether it results in a substantially unchanged or changed contract. You may contact Ibolya Ignat , Senior Staff Accountant, at (202) 551 -3636 or Sharon Blume, Accounting Branch Chief at (202) 551 -3474 if you have any questions regarding the comment. In this regard, do not hesitate to contact me at (202) 551 -3679 . Sincerely, /s/ Jim B. Rosenberg Jim B. Rosenberg Senior Assistant Chief Accountant Office of He althcare and Insurance