U.S. statutory accounting is defined by laws and practices prescribed and permitted by the individual states and the Accounting Practices and Procedures Manual. NAMIC members file statutory accounting financial statements on an individual legal-entity basis quarterly and annually. The annual independent audit opinion on these financial statements is filed in accordance with laws and regulations of the state where the insurer is based.
Regulatory accounting is used in different industries by regulators to communicate information on the companies they regulate. Statutory accounting is designed for regulatory use with the primary objective to protect policyholders. The three underlying principles to statutory accounting are conservatism, consistency, and comparability. The current requirements have many baseline requirements that all insurers are subject to, and have a significant degree of specialized rules by major product types, i.e., life, health, and property/casualty.
The statutory accounting model is generally more conservative than U.S. GAAP and works in concert with other regulatory tools, most notably, risk-based capital.
NAMIC supports the development of high-quality accounting standards, which should be cost effective to apply; result in measures that reflect the economic model used by the business; and used for both general purpose and regulatory financial reporting.
June 18, 2020 The Statutory Accounting Principles (E) Working Group met on June 15 to vote on a proposal to determine how insurance companies are to account for premium refunds issued in response to COVID-19. Ultimately the working group determined that all... Read more
May 22, 2020 The Statutory Accounting Principles (E) Working Group continues to propose and implement accounting interpretations related to COVID-19. An issue of great interest to NAMIC members relates to guidance on how to account for premium refunds issued in... Read more
April 16, 2020 The Statutory Accounting Principles (E) Working Group met via conference call on April 15 to adopt four accounting interpretations, three of them related to providing direct accounting relief to insurance companies impacted by the ongoing COVID-19... Read more
March 30, 2020 The Statutory Accounting Principles (E) Working Group was the only working group to meet and did so via conference call on March 18, a call that experienced many technical difficulties likely contributing to the decision to suspend the remainder of the... Read more
January 21, 2020 The House Financial Services Committee Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets held a hearing Jan. 15 titled “Overseeing the Standard Setters: An Examination of the Financial Accounting Standards Board and... Read more