Political Quotes

“Another important provision of our legislation addresses the issue of insurance accounting for a small number of non-publicly traded insurance companies. While every publicly traded company in the United States is required by the Federal Securities laws to prepare consolidated financial statements under Generally Accepted Accounting Principles, GAAP, all insurance companies in the United States--whether in mutual or stock form of organization--are required by their State insurance regulators to utilize an accounting method known as Statutory Accounting. Indeed, most mutual insurance companies only use Statutory Accounting in preparing their financial statements. Statutory Accounting Principles, SAP, are generally more conservative than GAAP because they are specifically designed to promote insurer solvency and the ability to pay claims instead of measuring an insurer's value as a going concern. SAP does not allow a number of non- liquid or intangible assets to be included on an insurer's balance sheet and provides less favorable accounting treatment for certain expenses. In both the text of the Dodd-Frank Act and its legislative history, Congress recognized the acceptability of SAP for holding companies engaged in insurance activities coming under Federal Reserve jurisdiction.…”