Ohio names 20 insurers receiving accounting breaks

The Ohio Department of Insurance today released the names of the 20 companies that have raised their surplus levels through approved accounting breaks. The 20 companies are subsidiaries of Ohio-based insurer groups. In order to receive the temporary accounting breaks, companies needed to have strong financial statements, have strong corporate governance practices, and must have provided a “reasonable strategic reason” for their request, the department said. The state will permit the carriers to use deferred tax assets — which are normally illiquid — as up to 15% of their statutory capital, instead of the usual 10%. The carriers can also realize those tax assets over three years, as opposed to the usual one year. The insurance companies can also apply a number of these deferred tax assets, equivalent to the federal income taxes that they had paid in previous years, as long as the insurers can reduce those tax liabilities by retroactively applying net operating losses to a preceding year’s income. In order to qualify for this treatment, carriers must pass a risk-based capital trend test or have a risk-based capital ratio of at least 250% for life companies and 300% for property/casualty companies. Another treatment applies to variable annuities with guaranteed lifetime benefits. This practice allows carriers to use an asset adequacy test on all variable annuities with guarantees, setting assumptions for policyholder behavior and assessing investment volatility for mortgages, stocks, bonds and synthetic assets. Companies that applied and received a permitted practice for deferred tax assets and raised their surplus level by the amount listed: AEGON U.S. Holdings Group of Cedar Rapids, Iowa: Western Reserve Life Assurance Co. of Ohio of Columbus, $45 million American Financial Group Inc. of Cincinnati: Annuity Investors Life Insurance Co. of Cincinnati, $2.6 million Continental General Insurance Co. of Omaha, Neb., $7.8 million Great American Insurance Co. of Cincinnati, $41.6 million Great American Life Insurance Co. of Cincinnati, $21.8 million Loyal American Life Insurance Co. of Cincinnati, $1.8 million Nationwide Corporation Group, based in Columbus, Ohio: Crestbrook Insurance Co. of Columbus, $4.49 million Nationwide Life Insurance Co. of Columbus, $68.9 million Nationwide Mutual Fire Insurance Co. of Columbus, $28.5 million Nationwide Mutual Insurance Co. of Columbus, $338 million Scottsdale (Ariz.) Insurance Co., $7.62 million Ohio National Life Group. (all companies are in Cincinnati): Ohio National Life Assurance Corp., $28 million Ohio National Life Insurance Co., $48.1 million Western Southern Group (all companies are in Cincinnati): Columbus Life Insurance Co., $10.6 million Integrity Life Insurance Co., $10.3 million Westfield Group of Westfield Center, Ohio: American Select Insurance Co. of Westfield Center, $898,788 Ohio Farmers Insurance Co. of Westfield Center, $12.6 million Old Guard Insurance Co. of Lancaster, Pa., $1.52 million Westfield Insurance Co. of Westfield Center, $4.08 million Westfield National Insurance Co. of Westfield Center, $3.01 million Ohio National Life Insurance also received the VA asset adequacy permitted practice, which increased its surplus by another $11.0 million.