Summary |
The other texts used in this course provide a generalized college-level treatment of basic accounting and finance principles as they apply to commercial enterprises. This text describes the principles and procedures of accounting and finance that specifically relate to property-liability insurance companies.
This book tries 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 protect the public interest.
More specifically, Chapter 1 describes various financial reports prepared by property-liability insurance companies. Emphasis is placed on an overview of the NAIC Annual Statement. Chapter 2 discusses asset valuation and the factors that influence the size and composition of a property-liability insurance company’s investment portfolio. Chapter 3 identifies the principal liability accounts of property-liability and examines the methods used to estimate or otherwise determine their values. In Chapter 4, attention turns from balance sheet accounts to income statement variables. Chapter 5 exposes students to a compendium of financial ratios useful in analyzing and comparing property-liability insurance companies. Chapter 5 also discusses methods used to detect financial distress and regulatory tools designed to help assure continued company solvency.
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