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ASSETS AND OTHER DEBITS

1. Investments-other than investment in affiliates.

(a) Bonds and notes.

(b) Preferred stocks.

(c) Common stocks.

(d) Mortgage loans on real estate.

(e) Real estate.

(f) Policy loans.

(g) Other loans and investments. (h) Invested cash.

(i) Total investments.

NOTES. (1) State the basis of determining the amounts shown in the balance sheet.

(2) State parenthetically for bonds and notes and preferred and common stocks either aggregate cost or aggregate value at the balance sheet date, whichever is the alternate to the amounts at which shown in the balance sheet. Consideration shall be given to the discussion of "Valuation of Securities" in Accounting Series Release No. 118 [35 FR 19986].

(3) State parenthetically accumulated depreciation and amortization deducted from investment real estate.

(4) Include under subcaption (h) share accounts in savings and loan associations, savings accounts, time deposits, certificates of deposit and other cash accounts and cash equivalents earning interest. State in a note any amounts subject to withdrawal or usage restrictions (see §§ 210.7A-03-2 and 210.5-02

1).

(5) State separately any class of investments included in subcaption (g) exceeding five percent of total assets; however, if an amount to be reported under subcaption (f), (g) or (h) is less than five percent of total assets it may be included under subcaption (g).

(6) State in a note the name of any person in which the total amount invested in the person and its affiliates, included in the above subcaptions, exceeded two percent of total investments. For the purpose of this disclosure consider as an investment, indebtedness and stock included in the several subcaptions above and the amount of any real estate included in subcaption (e) which was purchased or acquired during the five years preceding the date of the balance sheet. Indicate the amount included in each subcaption. An investment in bonds and notes of the United States Government, or of a government agency or authority, or of a state, municipality or political subdivision which exceeds two percent of total investments need not be reported.

(7) Investments in unconsolidated subsidiaries and 50 percent or less owned persons (including partnerships) which are held for investment purposes may be included under an appropriate subcaption above. The related equity in earnings shall be included under § 210.7A-04-2 and the amount of divi

dends or other distributions stated separately. Investments in unconsolidated entities held for operating purposes may not be so reported.

(8) State in a note any amounts included under subcaptions (a), (b), (d), (e), (g) and (h) which have been nonincome producing for the six months preceding the balance sheet date.

2. Cash and cash items. State separately (a) cash on hand and unrestricted demand deposits; (b) legally restricted deposits held as compensating balances against shortterm borrowing arrangements; (c) funds subject to repayment on call or immediately after the date of the balance sheet required to be filed; and (d) other funds, the amounts of which are known to be subject to withdrawal or usage restrictions, e.g., special purpose funds. The general terms and nature of such repayments provisions in (c) and withdrawal or usage restrictions in (b) or (d) shall be described in a note referred to herein (see § 210.5-02-1).

3. Investments and indebtedness of affiliates and other persons. (a) Investments. State separately amounts representing investments in affiliates and investments in other persons which are accounted for by the equity method, and state the basis of determining these amounts. State separately in the registrant's balance sheet the amounts which in the related consolidated balance sheet are (1) eliminated and (2) not eliminated.

(b) Indebtedness. Include under this caption amounts representing indebtedness of affiliates and indebtedness of other persons the investments in which are accounted for by the equity method. State separately in the registrant's balance sheet the amounts which in the related consolidated balance sheet are (1) eliminated and (2) not eliminated.

4. Accounts receivable. Include under this caption (a) amounts receivable from agents, (b) uncollected premiums, and (c) other receivables stating separately any category which is in excess of five percent of total assets. State separately the balance of the allowance for doubtful accounts which was deducted. That portion of deferred and uncollected premiums which represents adjustment of future policy benefits should be deducted from the liability for future policy benefits, and that portion which represents adjustment of acquisition cost should be added to deferred acquisition costs.

5. Accrued investment income. 6. Deferred policy acquisition costs. This amount shall not be deducted from future policy benefits. See §§ 210.7A-04-7 and 210.7A-05-1.

7. Property and equipment. Include under this caption the cost of real estate, furniture, fixtures and equipment used in the conduct of the insurance business and not nsidered as an investment. State parenMetically the accumulated depreciation and nortization deducted. The amount of any cumbrances shall be shown separately as liability. balance sheet being filed for each person or group: Provided, That any such schedule (other than Schedules I and IX) may be omitted if both of the following conditions exist:

8. Other assets. State separately any other em not properly classed in one of the preding asset captions which is in excess of ve percent of total assets. Include legaliy estricted deposits held as compensating alances against long-term borrowing arangements.

9. Assets held in separate accounts. Inlude under this caption the aggregate mount of assets funding the liabilities reated to variable annuities, pension funds nd similar activities. The corresponding agregate liability shall be included under capion 19.

10. Total assets and, when appropriate, ther debits.

FUTURE POLICY BENEFITS, LIABILITIES AND OTHER CREDITS

11. Future policy benefits. State separately iabilities for (a) life insurance and (b) accident and health insurance.

12. Policy and contract claims.

13. Other policyholders' funds. Include supplementary contracts without life contingencies, policyholders' dividend accumulations, premiums paid in advance, premium deposit funds and dividends to policyholders declared and unpaid and amounts estimated for payment in the following year. State separately any material amounts.

14. Notes payable. State here or in a note the information required under § 210.5-0229. Show separately any amount owed to affiliates.

15. Indebtedness to affiliates and other persons. Include under this caption amounts ✓ representing indebtedness to affiliates and indebtedness to other persons the invest☐ments in which are accounted for by the equity method. State separately in the registrant's balance sheet the amounts which in the related consolidated balance sheet are (a) eliminated and (b) not eliminated.

16. Accrued income taxes. State separately - the amount of (a) income taxes payable and (b) deferred income taxes. State separately the amount of deferred income taxes applicable to unrealized appreciation of invest

⚫ments.

17. Other liabilities. State separately any other item not properly classed in one of the preceding liability captions which is in excess of five percent of total liabilities. The ■ amount and terms (including commitment ☑ fees and the conditions under which commitments may be withdrawn) of unused commitments for long-term financing arrangements not provided for under $210.7A-03-14 shall be disclosed in the notes to the financial statements if significant.

18. Undistributed earnings on participating business. State the amount of earnings allocated to policyholders. Exclude dividends included above under caption 13.

19. Liabilities related to separate accounts.

20. Commitments and contingent liabilities. See §§ 210.3-16(i) and 210.7A-05-6.

REDEEMABLE PREFERRED STOCKS

21. Preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer. The classification and disclosure required by § 210.5-02.38 shall be given.

NON-REDEEMABLE PREFERRED STOCKS

22. Preferred stocks which are not redeemable or are redeemable solely at the option of the issuer. The classification and disclosure required by § 210.5-02.39 shall be given.

COMMON STOCKS

23. Common stocks. For each class of common shares state, on the face of the balance sheet, the title of the issue, the number of shares authorized, the number of shares issued or outstanding, as appropriate [see § 210.3-14 and § 210.3-15], and the dollar amount thereof, and, if convertible, the basis of conversion (see also § 210.316(f)(3)). Show also the dollar amount, if any, of common shares subscribed but unissued, and show the deduction of subscription receivable therefrom. Show in a note or statement referred to herein the changes in each class of common shares for each period for which an income statement is required to be filed.

OTHER STOCKHOLDERS' EQUITY

24. Other stockholders' equity. (a) Separate captions shall be shown for (1) additional paid-in capital, (2) other additional capital, (3) unrealized appreciation or depreciation of investments, (4) retained earnings (i) appropriated and (ii) unappropriated.

(b) If undistributed earnings of unconsolidated subsidiaries and 50 percent or less owned persons are included, state the amount in each category parenthetically or in a note referred to herein.

(c) Include in subcaption (a)(4)(i) above or in a note the purpose for which retained earnings have been appropriated.

(d) Exclude deferred income taxes from subcaption (a) (3) (see caption 16).

(e) For a period of at least 10 years subsequent to the effective date of a quasi-reorganization, any description of retained earnings shall indicate the point in time from which the new retained earnings dates and for a period of at least three years shall indicate the total amount of the deficit eliminated.

(f) See Rule 7A-05-2.

(g) A summary of each account under this caption setting forth the information prescribed by § 210.11-02 shall be given in a note or statement referred to herein for each period for which an income statement is required to be filed.

25. Total future policy benefits, liabilities, other credits, and stockholders' equity.

(Secs. 6, 7, 8, 10 and 19a (15 U.S.C. 77f, 77g, 77h, 77j, 77s); secs. 12, 13, 15(d) and 23(a) (15 U.S.C. 781, 78m, 780(d), 78w); secs. 5(b), 14 and 20(a) (15 U.S.C. 79e, 79n, 79t); secs. 8, 30, 31(c) and 38(a) (15 U.S.C. 80a-8, 80a-29, 80a-30(c) and 80a-37))

[39 FR 10119, Mar. 18, 1974, as amended at 40 FR 59341, Dec. 23, 1975; 44 FR 45613, Aug. 3, 1979]

§ 210.7A-04 Income statements.

(a) Income statements filed for life insurance companies shall comply with the following provisions:

PREMIUMS AND OTHER REVENUE

1. Premiumns. State separately the amount arising from (i) life insurance; (ii) accident and health insurance; (iii) considerations for supplementary contracts; and (iv) other. Considerations for supplementary contracts shall be reduced by the related amounts of death and other benefits and increase in future policy benefits and such amounts shall be excluded from subcaptions 4 and 5 below.

2. Net investment income. (i) State parenthetically expenses deducted from investment income.

(ii) State separately in a note in tabular form (a) investment income from each category of investments listed in the subcaptions of § 210.7A-03-1 which exceeds five percent of total investment income; (b) total investment income; (c) applicable expenses; and (d) net investment income.

3. Other income. State separately any material amounts indicating clearly the nature of the transactions out of which the items arose.

BENEFITS AND EXPENSES

4. Death and other benefits. State separately benefits for (i) life insurance; (ii) accident and health insurance; and (iii) other contracts.

5. Increase in future policy benefits. State separately provision for liabilities for (i) life insurance; (ii) accident and health insurance; and (iii) other contracts.

6. Provision for policyholders' share of earnings on participating policies. This caption is applicable only when the provision for policyholders' share of earnings on participating policies is not included as a benefit under death and other benefits.

7. Amortization of deferred policy acquisition costs. (i) Include under this caption only the amount of deferred policy acquisition costs amortized to income during the period.

(ii) State in tabular form in a note for (a) life insurance and (b) accident and health insurance, the nature of the costs deferred, the method and term of amortization and the amounts of (1) acquisition costs deferred. (2) amortization charged to income, (3) first year premiums written, and (4) renewal premiums. State separately any amount which is in excess of 15 percent of the total amount deferred during each period covered by an income statement indicating the nature of the amount, e.g., commissions, salesmen's salaries, direct mail selling expenses and issue expenses (see § 210.7A-05-1).

8. Other operating costs and expenses. Include all selling, general and administrative expenses not deferred as policy acquisition costs. State separately any material amounts. Do not include income taxes under this caption.

9. Income or loss before income tax expense and appropriate items below.

10. Income tax expense. Include under this caption only taxes based on income. Taxes applicable to profits or losses on securities and extraordinary items shall not be included under this caption [see § 210.3-16(0)).

11. Equity in earnings of unconsolidated subsidiaries and 50 percent or less owned persons. The amount reported under this caption shall be stated net of any applicable tax provisions and shall exclude profits or losses on investments. State parenthetically or in a note referred to herein the amount of dividends received from such persons.

12. Minority interest in income of consolidated subsidiaries.

13. Income or loss before realized profits or losses on investments and extraordinary items.

14. Realized profits or losses on investments, less applicable tax. State separately (i) net realized investment profits or losses of the insurance company and (ii) equity in net realized investment profits or losses of (a) unconsolidated subsidiaries and (b) 50 percent or less owned persons for which the equity in earnings was reported under caption 11 disclosing parenthetically or otherwise the tax applicable to such amounts. No profits or losses on the insurance company's own equity securities, or equity in profits or losses of its affiliates on their own equity securities, shall be included under this caption. State, here or in a note referred to herein, the method followed in determining the cost of investments sold by the insurance company, e.g., "average cost," "first-in, first-out," or "identified certificate." Consideration should be given to reporting transactions of the insurance company under

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caption 16, when appropriate. (See § 210.7A05-4.)

15. Income or loss before extraordinary items.

16. Extraordinary items, less applicable tax. State separately (i) extraordinary items of the person and (ii) equity in extraordinary items of (a) unconsolidated subsidiaries and (b) 50 percent or less owned persons for which the equity in earnings was reported under caption 11, disclosing parenthetically or otherwise the tax applicable to such amounts.

17. Net income or loss. See § 210.7A-0322(g).

18. Earnings per share data. Refer to the pertinent requirements in the appropriate filing form. No per share figures shall be based on net income or loss determined in accordance with statutory accounting requirements. (See § 210.7A-02-2.)

§210.7A-05 Special notes to financial statements.

1. Accounting principles and practices. Information shall be given in a note as to accounting principles and practices reflected in the financial statements concerning the following matters. (See also § 210.3-08.)

(a) Consolidation of subsidiaries.

(b) Valuation of investments and recognition and reporting of unrealized appreciation or depreciation and profits or losses on investments.

(c) Recognition of premium revenue and related expenses.

(d) The nature of deferred policy acquisition costs and the method and period of am✔ortization.

(e) The range of interest rates, mortality and withdrawal assumptions and the methods employed in calculating policy reserves.

2. Restrictions on stockholders' equity. (a) The nature of any restriction on stockholders' equity created by statutory accounting requirements shall be explained in a note. See also § 210.3-16(h).

(b) Explain in a note any deficiency or imminent deficiency in the statutory requirements for capital surplus and the possible effect of such deficiency on the financial • statements.

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3. Income taxes. Information and appropriate explanations shall be given on the general nature of the provisions of the Internal Revenue Code applicable to life insurance companies. In addition to the general requirements of § 210.3-16(0), the following specific information shall be furnished.

(a) The bases and assumptions upon which current and deferred income taxes have been or have not been provided. Disclose in a note the amount of income upon which neither current nor deferred taxes have been provided for each period for which an income statement is filed and the

accumulated amount as of the date of the related balance sheet.

(b) The nature of "policyholders' surplus" as defined in the Internal Revenue Code, the additions to "policyholders' surplus" for each period for which an income statement is filed, and the accumulated amount as of the date of the related balance sheet.

(c) The amount of accumulated net operating loss carryforwards, if any, at the date of the latest balance sheet and the years in which such carryforwards will expire.

4. Analysis of investment gain. For each period for which an income statement is filed state separately for (a) bonds and notes [see § 210.7A-03-1(a)) and (b) stocks [see §§ 210.7A-03-1(b) and (c)) the following information: (1) the portion of the realized profits or losses on investments, less applicable tax, included in § 210.7A-04-14 which relates to each of the above categories; (2) the change during the reporting period in the difference between value and cost for each of the above categories; and (3) the total or net balance, as appropriate, for each category.

5. Participating insurance. State in a note the relative significance of participating insurance expressed as percentages of insurance in force, number of policies in force and premium income; and the method by which earnings and dividends allocable to such insurance is determined.

6. Reinsurance. Information and appropriate explanations shall be given on the general nature of reinsurance contracts. The following specific information shall be furnished:

(a) The amount of life insurance in force ceded to other companies and the amount of accident and health insurance premiums ceded to other companies and the method of accounting for such reinsurance.

(b) The relative significance of reinsurance assumed expressed for life insurance as percentages of life insurance in force and premium income, and for accident and health insurance as a percentage of accident and health premium income.

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(i) The financial statements are being filed as part of an annual or other periodic report; and

(ii) The information that would be shown in the respective columns of such schedule would reflect no changes in any issue of securities of the registrant or any significant subsidiary in excess of five percent of the outstanding securities of such issue as shown in the most recently filed annual report containing the schedule.

(2) Schedule IX, Capital Shares, may also be omitted if the above two conditions exist and any information required by column G of the schedule is shown in the related balance sheet or in a note thereto.

(3) All other schedules specified below in this rule as Schedules II, III, IV, V, VI and VIII shall be filed for each period for which an income statement is required to be filed for each person or group.

(b) When information is required in schedules for both the registrant and the registrant and its consolidated subsidiaries it may be presented in the form of a single schedule: Provided, That items pertaining to the registrant are separately shown and that such single schedule affords a properly summarized presentation of the facts. If the information required by any schedule (including the notes thereto) may be shown in the related financial statement or in a note thereto without making such statement unclear or confusing, that procedure may be followed and the schedule omitted.

(c) The schedules shall support the financial statements prepared in accordance with generally accepted accounting principles except for statements prepared in accordance with § 210.7A-02-4. Reference to the schedules shall be made in the appropriate captions of the financial statements. Where, pursuant to the applicable instructions, the supporting schedules do not accompany the financial statements, references to such schedules shall not be made.

(d) The schedules shall be examined by the independent accountant if the related financial statements are so examined.

Schedule I-Summary of InvestmentsOther than Investments in Affiliates. The schedule prescribed by § 210.12-27 shall be filed in support of caption 1 of each balance sheet.

Schedule II-Investments in Equity in Earnings of, and Dividends Received from Affiliates and Other Persons. The schedule prescribed by § 210.12-04 shall be filed in support of caption 3(a) of each balance sheet. This schedule may be omitted if neither the sum of captions 3(a) and 3(b) in the related balance sheet nor the amount of caption 15 in such balance sheet exceeds five percent of total assets as shown by the related balance sheet at either the beginning or end of the period.

Schedule III-Indebtedness of Affiliates and Other Persons. The schedule prescribed by § 210.12-05 shall be filed in support of caption 3(b) of each balance sheet; however, the required information may be presented separately on Schedule II or Schedule IX. This schedule may be omitted if neither the sum of captions 3(a) and 3(b) in the related balance sheet nor the amount of caption 15 in such balance sheet exceeds five percent of total assets as shown by the related balance sheet at either the beginning or end of the period.

Schedule IV-Deferred Policy Acquisition Costs. The schedule prescribed by § 210.1231A shall be filed in support of caption 6 of each balance sheet provided that this schedule may be omitted if the total shown by caption 6 does not exceed five percent of total assets as shown by the related balance sheet at both the beginning and end of the period and if neither the additions nor the deductions during the period exceeded five percent of total assets as shown by the related balance sheet at either the beginning or end of the period.

Schedule V-Amounts Receivable from Underwriters, Promoters, Directors, Officers, Employees, and Principal Holders (other than Affiliates) of Equity Securities of the Person and its Affiliates. The schedule prescribed by § 210.12-03 shall be filed with respect to each person among the underwriters, promoters, directors, officers, employees, and principal holders (other than affiliates) of equity securities of the person and its affiliates from whom an aggregate indebtedness of more than $20,000 or one percent of total assets, whichever is less, is owed or, at any time during the period for which related income statements are required to be filed, was owed. For the purposes of this schedule exclude in the determination of the amount of indebtedness all amounts receivable from such persons for

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