Clarification

By Staff Writer

August 12, 2001 at 08:00 PM

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–An article by Frederick S. Townsend in the July 16 issue, "Accounting Changes Triggered By Codification Increased Insurers' Surplus," included the statement that "Largest capital losses were reported by Teachers with $1,035 million."

Townsend says Teachers Insurance and Annuity points out that National Association of Insurance Commissioners Codification required a restatement of prior years' gains (of prepayment penalties on mortgage loans and private placement bonds) from capital gains to investment income. This cumulative effect adjustment created an $895 million adjustment as part of the $1,035 million capital loss reported for Teachers in the article.

Teachers also points out that the New York Insurance Department did not permit domestic companies to include a deferred tax asset in their 3/31/01 statutory statements, which may have resulted in lower NAIC Codification surplus adjustments for some other New York companies.

– In the June 11 article by Randy Zipse, the projections in example 1 should have stated retirement in 20 years, not 15.

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 13, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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