Illinois and Ohio insurance regulators have posted Web notices discussing how they will respond to life insurers’ requests for changes in accounting rules.
Illinois says it will keep its rules the same.
The Illinois Department of Financial and Professional Regulation appreciates the efforts of the Capital and Surplus Relief Working Group at the National Association of Insurance Commissioners, Kansas City, Mo., to evaluate the 9-point capital and surplus rules change package proposed by the American Council of Life Insurers, Washington, Illinois Insurance Director Michael McRaith writes in Bulletin 2009-02.
“The division also recognizes the need to consider each company’s particular financial circumstances,” McRaith writes.
Illinois “will not broadly or by blanket application reduce accounting standards governing capital and surplus adequacy,” McRaith writes.
But individual companies can ask for individual variances from statutory accounting practices, McRaith writes.
“This consideration will be based on the specific applicant’s substantive explanation in support of the requested practice and the consumer impact of the variance, if approved,” McRaith writes.
Ohio says it will allow temporary changes in use of deferred income tax assets and reserve calculations for variable annuities with guaranteed living benefits.
Insurers cannot use the admitted DTA change in connection with any regulatory triggers, such as minimum capital surplus requirements, that involve admitted assets or statutory surplus, Ohio Insurance Superintendent Mary Jo Hudson writes in Bulletin 2009-04.
Insurers that shift to the new VA living benefit guarantee asset adequacy analysis approach must show that they have consider how policyholders might use VA contract options and how VA holders have behaved recently, Hudson writes in Bulletin 2009-03.
“Any financial benefit derived … may not be used in the determination of any dividends or other distributions available for shareholders,” Hudson writes.
Earlier, Iowa insurance regulators published a bulletin talking about how they will handle statutory accounting concerns in their state.