At least 20 insurers have asked states for relief from the usual capital and surplus statutory accounting rules.

More insurers are seeking variations by using states’ “permitted practices” rules, officials say.

About 20 companies have applied to the Ohio Department of Insurance for relief in response to bulletins issued Feb. 3, according to Carly Glick, a department representative. Reply letters will be sent to the companies next week, Glick says.

Hartford Financial Services Group Inc., Hartford, disclosed this week that it has asked the Connecticut department for changes that will improve its financial position by $987 million. Connecticut Insurance Commissioner Thomas Sullivan has granted the changes requested.

States’ use of permitted practices rules to offer insurers capital and surplus relief may force companies to ask for relief in order to remain competitive with other companies that already have applied for relief, according to Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas.

Birnbaum and Robert Hunter, an insurance specialist at the Consumer Federation of America, Washington, are arguing that any capital and surplus relief proposals should go through the full rulemaking process at the National Association of Insurance Commissioners, Kansas City, Mo.

In addition to creating competitive conflicts between companies, use of permitted practices in individual states could create conflicts between states, Birnbaum says.

Hunter and Birnbaum today wrote to commissioners to ask the NAIC to publish by March 1 the total number of requests for permitted practices related to capital and reserve relief for reporting year 2009.

The information should be broken out by state, by type of company and by type of relief requested, Hunter and Birnbaum write.

Hunter and Birnbaum are not asking commissioners to release the names of the insurers making the relief requests.

Birnbaum wrote to Sullivan Thursday via electronic mail to ask about the relief granted to Hartford.

Correspondence regarding the request should not be considered confidential, because Hartford discussed the request publicly in the Form 10-K report it filed with the U.S. Securities and Exchange Commission, Birnbaum says in the e-mail.

“An insurer cannot claim privilege when it has waived that privilege by releasing the information to the public,” Birnbaum writes.

At press time, the NAIC could not be reached for comment.

Other states are starting to weigh in on whether they will offer capital relief.

Iowa, like Ohio, has described the relief it will offer in bulletins.

Illinois, Maine and New York say they will consider requests for relief on a company-by-company basis but will not change the rules for all companies.

Pennsylvania has not received a company request as there are no provisions under state insurance laws for insurers to have less than minimal capital and surplus, according to Katy Gresh, a department representative.

Pennsylvania does not generally allow use of permitted practices, Gresh says.

Indiana is letting a unit of Lincoln National Corp., Philadelphia, that is domiciled in Indiana use some regulatory permitted practices for year-end 2008 statutory accounting purposes, according to Lauren Sammerson, a Lincoln representative.