The staff at the U.S. Securities and Exchange Commission is pushing forward with a policy shift that may help life insurers save some money on variable annuity accounting.
The SEC staff put out a “no-action letter” ruling Thursday that gives two life insurers permission to use the financial statements they have prepared for state insurance regulators, rather than the accounting rules that usually apply to “publicly traded” companies, in the registration statement forms for indexed annuities that are filed as variable annuities.
The insurers are Symetra Life Insurance Company and a sister company, First Symetra National Life Insurance Company of New York. Both are now part of Sumitomo Life Insurance Company of Osaka.
Life insurers prepare many different types of financial statements for state insurance regulators using the regulators’ own Statutory Accounting Principles (SAP).
“Publicly traded companies,” or companies that have sold stock to large number of investors, use Generally Accepted Accounting Principles (GAAP).
The SEC does not require life insurers to file documents related to specific life insurance or annuity products that are classified as fixed products. Life insurers submit filings for those products to state insurance regulators.
Life insurers do have to file registration forms, which are comparable to mutual fund registration forms, for products classified as variable products.
The SEC posts the variable product filings here.
In the past, the SEC required insurers to include GAAP financial statements with their registration statements.