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.
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
January 16, 2020 The Statutory Accounting Principles (E) Working Group hosted a teleconference Jan. 8 to discuss comments received from industry representatives on a controversial proposal that, if adopted, would... Read more
January 13, 2020 The House Financial Services Committee will hold a hearing Jan. 14 titled “An Examination of the Financial Accounting Standards Board and the Public Company Accounting... Read more
December 13, 2019 The Statutory Accounting Principles (E) Working Group met Dec. 7 to adopt changes to statutory accounting and reporting and to consider several new proposals and re-expose others. Adopted at this national meeting was a change to... Read more
August 29, 2019 The Financial Accounting Standards Board, which promulgates accounting standards for U.S. corporations, recently proposed to delay the implementation of Accounting Standard Update: Current Expected Credit Losses. The proposed delay would grant... Read more