Iowa eases accounting rules for 11 insurers

The Iowa insurance commissioner has eased accounting rules for 11 insurers based in the state, allowing them to polish up their balance sheets. The relaxed accounting rules, originally published in a state bulletin Feb. 3, permit approved carriers to increase their statutory surplus and capital — the cushion that buffers unexpected claims — by allowing insurers to adjust their treatment of deferred tax assets on their balance sheets. These deferred tax assets result from operating losses and are illiquid, so they are not available to cover claims. Under Iowa’s new rules, eligible carriers may count these deferred tax assets as 15% of their statutory surplus and capital, realizing the assets over a three-year period. Normally, carriers nationally can only count these assets toward 10% of their statutory surplus and capital, realizing them over one year. Iowa’s permitted practice is effective for financial reporting periods ending on or after Dec. 31 and will expire on Dec. 15, 2009. Iowa-domiciled companies that received relief were notified as late as Thursday afternoon, said Tom Alger, spokesman for the Iowa Insurance Commission. The companies include CUMIS Insurance Society Inc. and CUNA Mutual Insurance Society, both of Waverly; Equitrust Life Insurance Co., Farm Bureau Life Insurance Co., Farm Bureau Mutual Insurance Co., Midland National Life Insurance Co., and North American Company for Life & Health Insurance, all of West Des Moines; Principal Life Insurance Co., ING USA Annuity & Life Insurance Co. and Aviva Life and Annuity Co. of Des Moines; and Transamerica Life Insurance Co. of Cedar Rapids.