Summary |
This book attempts to explain how the administrative and quasi-legislative power of state insurance regulatory authorities, acting principally through the National Association of Insurance Commissioners, has been used to develop and impose insurance accounting and finance practices that safeguard the public interest. This traditionally has meant promulgation of accounting rules that encourage continuity of operations. The focus of insurance accounting and finance therefore differs from the more general principles and practices encountered in other businesses. The variations between generally accepted accounting principles and insurance regulatory accounting are identified in the text. This text also examines the rationale that gives rise to the differences.
Chapter 1 describes various financial reports prepared by property-liability insurance companies. Chapter 2 discusses asset valuation and the factors that influence the size and composition of a property-liability insurance company’s investment portfolio. In Chapter 3 the principal liability accounts of nonlife insurers are identified, and the methods used to estimate or otherwise determine their values are examined. Attention turns from balance sheet accounts to income statement variables in Chapter 4. Chapter 5 exposes the reader to a compendium of financial ratios useful in analyzing and comparing property-liability insurance companies.
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