The allowance in the bulletin runs from Dec. 31, 2008, through Dec. 15, 2009.
A copy of the bulletin is available here. //www.iid.state.ia.us/docs/bull0901.pdf
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.