What is statutory basis of accounting?
The Statutory Accounting Principles (SAP) are accounting regulations for the preparation of an insurance firm’s financial statements. The focus of SAP is to ensure the solvency of insurance firms so that they are able to meet the obligations to their policyholders. State law oversees the implementation of SAP.
What is SSAP 62R?
SSAP No. 62R—Property and Casualty Reinsurance provides the following: 129. This statement adopts with modification FASB Statement No. 113, Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts (FAS 113) and FASB Emerging Issues Task Force No.
What is SSAP accounting?
SSAP, or Statements of Standard Accounting Practice, are edicts by which trading companies that are listed on the stock market must adhere to when constructing their financial reports. They form part of the Generally Accepted Accounting Practice, or GAAP, which is statutory in the United Kingdom through the Taxes Acts.
What is the difference between GAAP and stat accounting?
GAAP is a set of accounting standards and procedures that companies have agreed to use when reporting their financial data. STAT is a set of accounting standards and procedures that insurance companies use to report their financial data. GAAP and STAT procedures differ considerably.
What is included in statutory accounts?
Statutory accounts must include a balance sheet, a profit and loss account, cashflow statement, notes to the accounts and a directors’ report, together with a cover, contents and company information pages.
What are statutory financials?
Statutory Financial Statements means all financial statements of the Company’s subsidiary insurance companies for each relevant period, each prepared in accordance with Applicable Accounting Principles.
What is the difference between SAP and GAAP?
The Generally Accepted Accounting Principles (GAAP) framework is designed for multiple users and highlights financial performance over time, whereas the Statutory Accounting Principles (SAP) framework is designed for regulators and highlights whether an insurance company can pay its claims and honor its obligations to …
What are stat financials?
Statutory financial statements are the annual, quarterly or bi-annual consolidated financial statements of your company. These statements provide information on the income, expenses, balance sheets, budgets, and are reviewed by a statutory auditor.
What are stat entries?
The STAT term is generally used to refer to the local statutory books of accounts to reflect the operations in a specific foreign country for operations in that country as per the Local GAAP for that specific country.
Are statutory accounts audited?
Put simply, a statutory audit is an independent assessment of the financial accounts of a company or institution. The auditor’s role is to report on whether the financial statements issued by an organisation are ‘true and fair’, and meet all relevant guidelines or legal requirements.
What is statutory reporting in accounting?
What is Statutory Reporting. Statutory reporting can be defined as: “The mandatory submission of financial and non-financial information to a government agency.” Additionally, each industry has its own set of laws, regulations and regulatory bodies that mandate reports.
What is a statutory balance sheet?
Statutory Balance Sheet means the consolidated balance sheet of the Regulated Subsidiaries as of and for the period ending on the Closing Date prepared in accordance with Statutory Accounting Principles.
What is the purpose of statutory accounting principles?
The Statutory Accounting Principles (SAP) are accounting regulations for the preparation of an insurance firm’s financial statements. The focus of SAP is to ensure the solvency of insurance firms so that they are able to meet the obligations to their policyholders.
Where to find GAAP guidance for statutory accounting?
The GAAP guidance can be 1) adopted; 2) adopted with modification; or 3) rejected for statutory accounting. Information regarding the decision for GAAP guidance can be found in the various SSAPs (Statements of Statutory Accounting Principles) and collectively in Appendix D – GAAP Cross-reference to SAP.
What are permitted accounting practices for insurance companies?
Permitted Accounting Practices: Accounting practices specifically requested by an insurers that depart from NAIC SAP and state prescribed accounting practices, and have received approval from the insurer’s domiciliary state regulatory authority.
How does SFAS 113 relate to reinsurance accounting?
SFAS No. 113 defines reinsurance (i.e., a transaction that receives reinsurance accounting) in a restrictive manner. For example, reinsurance of deferred annuities would generally not be considered reinsurance from a GAAP accounting perspective, although it could be reinsurance for statutory accounting.