The Financial Accounting Standards Board is an independent body, funded by accounting firms, that...
statutory accounting principles (SAP)
Statutory accounting principles are rules for insurance accounting codified by the National Association of Insurance Commissioners or as promulgated by a domicile as rules to be used in reporting an insurer's results to regulators.
Additional Information
These rules focus on the balance sheet and solvency analysis, and differ from the generally accepted accounting principles used for other types of businesses. For example, statutory accounting rules do not allow the inclusion of certain nonadmitted assets on the balance sheet, require that certain loss reserves be set by conservative formulas instead of the insurer's estimates, require the insurer to immediately recognize the expenses associated with writing new business instead of amortizing them over the policy period, and do not allow premiums for reinsurance placed with unauthorized reinsurers to be recognized as an asset.
Related Terms
Generally Accepted Accounting Principles are an accounting method designed to match revenue and...
National Association of Insurance Commissioners (NAIC) is a trade association of state insurance...
