The National Association of Insurance Commissioners has released a list of the insurers that are using non-standard accounting practices in their 2008 statutory financial filings.
The report includes non-standard accounting practices required by insurers’ states of domicile as well as non-standard practices that the insurers themselves asked for permission to use.
The NAIC, Washington, calls the non-standard practices required by state regulators “prescribed practices,” and it calls the non-standard practices permitted by state regulators “permitted practices.”
The NAIC found that at least 58 life insurers are using prescribed practices in their 2008 statutory filings, and 57 are using permitted practices, with 18 using both prescribed practices and permitted practices.
The 97 insurers reporting use of non-standard practices are posting a total of $23 billion in net losses for 2008 and $125 billion in total capital and surplus.
Prescribed practices increased the life insurers’ combined 2008 capital and surplus by $7.7 billion, or 6.2%.
Permitted practices increased the life insurers’ combined capital and surplus by about $6 billion, or 4.8%.
The list of insurers using permitted practices includes 25 insurers that added more deferred tax assets to capital and surplus than current standard NAIC rules normally would permit. DTA permitted practices increased the total capital and surplus of the insurers included in the report by $2.4 billion, or 1.9%.
In 8 instances, states let insurers add the value of their furniture to their capital and surplus.
The NAIC says prescribed or permitted practices helped 3 of the insurers listed avoid “risk-based capital events.”
The NAIC report, which appears to be the first of its kind that the NAIC has compiled, includes information about non-standard practices used by property-casualty insurers and by health insurers as well as by life insurers.