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PA Bulletin, Doc. No. 04-2293


Disclosure of Departures From Statutory Accounting Principles; No. 2004-11

[34 Pa.B. 6807]

   This document supersedes the notice published at 33 Pa.B. 5888 (November 29, 2003) and shall remain in effect until a subsequent notice is published in the Pennsylvania Bulletin.

   The National Association of Insurance Commissioners (NAIC) adopted codified statutory accounting principles in March 1998. By Insurance Department Notice Nos. 1998-04 and 2000-02, all types of domestic insurers were advised of the requirement to adhere to the NAIC's codified Accounting Practices and Procedures Manual (Manual) in preparing financial statements to be filed with the Pennsylvania Insurance Department (Department) beginning with quarterly financial statements filed as of March 31, 2001. The Manual is not intended to preempt the legislative and regulatory authority of the states. It is intended to establish a comprehensive basis of accounting to be recognized and adhered to if not in conflict with the statutes or regulations of an insurer's domiciliary state (such as, state laws relating to permissible investments) or when the domiciliary state's statutes and regulations are silent.

   This notice is to advise all domestic insurers that the Department has identified the following Pennsylvania laws and regulations relating to statutory financial statement presentation that may require disclosure as a departure from the Manual in the notes to financial statements and CPA audit reports1:

Pennsylvania Laws and Regulations NAIC Statements of Statutory Accounting Principles
(SSAP) and Appendices
31 Pa. Code Chapter 116 (relating to discounting workers' compensation loss reserves) SSAP No. 55 Unpaid Claims, Losses and Loss Adjustment Expenses and SSAP No. 65 Property and Casualty Contracts
31 Pa. Code Chapter 118 (relating to discounting medical malpractice loss reserves) SSAP No. 55 Unpaid Claims, Losses and Loss Adjustment Expenses and SSAP No. 65 Property and Casualty Contracts
31 Pa. Code Chapter 84a (relating to minimum reserve standards for individual and group health and accident insurance contracts) SSAP No. 54 Individual and Group Accident and Health Contracts and Appendix A-010 Minimum Reserve Standards for Individual and Group Health Insurance Contracts
31 Pa. Code § 73.138 (relating to reserves for credit life, accident and health insurance) SSAP No. 59 Credit Life and Accident and Health Insurance Contracts
31 Pa. Code § 89.a.116 (relating to long-term care insurance) Appendix A-641 Long-Term Care Insurance
Sections 714--716 of The Insurance Company Law
of 1921 (40 P. S. §§ 910-14--910-16) (relating to unearned premium reserves of title insurance companies)
SSAP No. 57 Title Insurance and Appendix A-628 Title Insurance
Section 661 of The Insurance Company Law of 1921 (40 P. S. § 832) (relating to surety companies) SSAP No. 55 Unpaid Claims, Losses and Loss Adjustment Expenses and SSAP No. 65 Property and Casualty Contracts
Section 1008 of The Insurance Company Law of 1921 (40 P. S. § 968) (relating to reserves of reciprocal and inter-insurance exchanges) SSAP No. 53 Property Casualty Contracts--Premiums
31 Pa. Code Chapter 161.8 (relating to credit for reinsurance ceded to alien nonaffiliated insurers which write no primary coverages in the United States) SSAP No. 62 Property and Casualty Reinsurance
31 Pa. Code Chapter 161.6 (relating to revocation of reinsurer qualification) Appendix A-785 Credit for Reinsurance (9.e.)
31 Pa. Code Chapter 84b (relating to actuarial opinion and memorandum) Appendix A-822 Asset Adequacy Analysis Requirements (effective 09/11/2002)

   The laws and regulations referenced in this notice are not intended to be an all-inclusive list. This notice is intended only to provide general guidance in the review of Pennsylvania laws and regulations for purposes of required disclosures in financial statements and CPA audit reports. Questions concerning this notice may be directed to Stephen J. Johnson, CPA, Deputy Insurance Commissioner, Office of Corporate and Financial Regulation, 1345 Strawberry Square, Harrisburg, PA 17120, (717) 783-2142, fax (717) 787-8557 and

Insurance Commissioner

[Pa.B. Doc. No. 04-2293. Filed for public inspection December 23, 2004, 9:00 a.m.]


1  See SSAP No. 1, Disclosure of Accounting Policies, Risks & Uncertainties, and Other Disclosures in the NAIC Manual.

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