Iowa is giving 10 life insurance companies capital and surplus relief by letting them use a Feb. 3 bulletin that temporarily relaxes deferred tax asset rules.
Tom Alger, an Iowa Insurance Division spokesman, says the companies that applied for and were granted relief include:
- Aviva Life & Annuity Company, Des Moines.
- CUMIS Insurance Society Inc., Waverly.
- Principal Life Insurance Company, Des Moines.
- Farm Bureau Mutual Insurance Company, West Des Moines.
- Farm Bureau Life Company, West Des Moines.
- CUNA Mutual Insurance Society, Waverly, Iowa.
- Midland National Life Insurance Company, Des Moines.
- Transamerica Life Insurance Company, Cedar Rapids, Iowa.
- North American Company Life & Health Insurance Company West Des Moines.
- ING USA Annuity & Life Insurance Company, Des Moines.
The bulletin issued by the Iowa insurance department changes the amount of time available for realizing deferred tax assets to 3 years, from 1 year, or to 15%, from 10%, of statutory capital and surplus.
The allowance in the bulletin runs from Dec. 31, 2008, through Dec. 15, 2009.
Pennsylvania Insurance Commissioner Joel Ario, who participated in the Jan. 29 vote on the capital and surplus rules changes during a conference call organized by the National Association of Insurance Commissioners, Kansas City, Mo., says that, as of Feb. 18, the Pennsylvania department had not received any requests for capital and surplus relief.
Ario says he has received a general call from an industry representative asking how the department would handle the issue.
Ario says he responded that companies could approach the department and that their requests would be reviewed on a case-by-case basis. In any given year, individual companies in any line of business can approach the department if there are unique situations, Ario says.
The most common reason for the use of a “permitted practice,” or variation from the usual statutory accounting procedures, would be a rating downgrade of a company that was generally in good shape but needed specific relief with a financial filing requirement, Ario says.
Critics say states’ use of permitted practices rules could create a lack of uniformity, “but I hope it doesn’t,” Ario says.
Some companies that have received relief under permitted practices may delay filing financial states for a week or two, Ario says.
Use of permitted practices is not a reversal of the NAIC vote, Ario says.
“Everyone realizes that this is an unusual year,” and that there will be greater use of permitted practices than is usual, Ario says.
Other states, such as Connecticut and Indiana, also have used permitted practices rules to offer temporary relief to insurers.
The Ohio Department of Insurance says 20 companies will receive capital relief under bulletins that the department issued earlier this month.
The New Jersey Department of Banking and Insurance says there are no plans to use permitted practices rules to offer domiciled companies capital and surplus relief.