meaning of acquisition costs

acquisition costs meaning in Insurance Dictionary

Direct costs an insurer incurs to "acquire" the premium—for instance, commissions paid to a broker or fronting organization. These prices are expected to be expensed in the same proportion whilst the premiums to which they relate tend to be gained. For a calendar year policy, purchase prices are expensed uniformly each month, with the quantity to be expensed in the future durations taped as deferred acquisition expenses (an asset) in the stability sheet.