The National Association of Insurance Commissioners has adopted an accounting change that will help insurers include a higher percentage of the tax payment reductions they expect to enjoy in the future in their financial statements.
The change, a revision of Statement of Statutory Accounting Principles Number 10-Income Taxes, will affect how insurers handle deferred tax assets.
The NAIC, Kansas City, Mo., approved the DTA SSAP revision this weekend in San Francisco, at its winter meeting.
An insurer may be able to say it has a deferred tax asset when a difference between a statutory accounting value and a tax accounting value is on track to reverse and, at some point, reduce future tax payments.
The American Council of Life Insurers, Washington, included an easing of DTA accounting rules in a package of emergency accounting relief proposals it submitted to the NAIC about a year ago, in response to the recent economic crisis.