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.
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
August 12, 2019 As usual, the Statutory Accounting Principles Working Group had a robust meeting agenda when it met on Aug. 3. There were only a few items adopted for statutory accounting purposes, but there were several new and ongoing issues discussed. Read more
August 16, 2018 The Statutory Accounting Principles Working Group adopted five non-substantive revisions and exposed 18 non-substantive and four substantive revisions to statutory accounting during its two-and-one-half hour meeting on Aug. 4. In addition to these... Read more
June 21, 2018 The Idaho Department of Insurance has announced that it has adopted the March 2018 version of the NAIC's Accounting Practices and Procedures Manual for authorized insurers' use when preparing quarterly and annual financial... Read more
April 4, 2018 Statutory accounting and risk-based capital together form a unique solvency framework that requires experts from both areas to collaborate on key conceptual matters. Several of these types of issues were discussed, referred, and/or exposed for comment ... Read more