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Flashcards in NAIC Preamble Deck (8)
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1

Accounting definition

Process of accumulating and reporting financial information about an economic unit

2

Conservatism

Providing a margin of protection; Valuation procedures should aim to prevent sharp fluctuations in surplus

3

Codification

Provide comprehensive guide to statutory accounting

4

Prior to codification

Insurers uncertain which rules to follow; regulators unfamiliar with other states' rules

5

Hierarchy of applying accounting rules

1. SSAPs
2. Emerging Issues Working Group
3. NAIC
4. SAP Statement of Concepts
5. Sources of non-authoritative literature

6

Permitted accounting practices

Specifically requested by insurer, inconsistent with SAP and state prescribed accounting practices (requires approval)

7

Prescribed accounting practices

Included directly in state laws; applicable to all insurers domiciled in the state

8

Source publications for preparing and issuing statutory financial statements (US)

SSAPs
NAIC's Accounting Practices and Procedures Manual (APPM)