Definition
Commissioner’s Values: A comprehensive list of the values of securities, meticulously published annually by the National Association of Insurance Commissioners (NAIC). These values are utilized by insurance companies to report the value of their owned securities accurately on their balance sheets.
Meaning
Commissioner’s Values serve as an authoritative reference for insurance companies when valuing their investments. Proper valuation ensures that the financial statements accurately reflect the company’s fiscal health and meet regulatory standards.
Etymology
The term derives from the role of Commissioners in the insurance industry, specifically those at the NAIC, combined with values, referring to the monetary worth of securities.
Background
First implemented to create uniformity and ensure transparency in financial reporting within the insurance industry, Commissioner’s Values are vital for regulatory compliance and for stakeholders to evaluate an insurance company’s solvency and stability. The NAIC ensures this through detailed annual publications.
Key Takeaways
- Regulatory Compliance: Insurance companies must use Commissioner’s Values to adhere to regulatory standards.
- Consistency: Ensures uniform and consistent reporting across the industry.
- Transparency: Enhances stakeholder trust through accurate portrayal of financial health.
- Guidance: Offers a benchmark for auditors and regulatory authorities.
Differences and Similarities
Differences
- Market-Determined Values: Fluctuate based on market conditions; may differ from Commissioner’s Values, which are consistent benchmarks.
- Book Values: Reflect historical cost minus depreciation, which may differ from Commissioner’s Values due to updated assessments.
Similarities
- Both types of values: Used for documenting financial positions.
- Regulatory adherence: Ensures conforming to established financial standards.
Synonyms
- Regulatory Value List
- NAIC Securities Valuation
- Authorized Valuation Guide
Antonyms
- Market Fluctuations
- Dynamic Securities Pricing
Related Terms with Definitions
- NAIC: National Association of Insurance Commissioners, the body responsible for creating Commissioner’s Values.
- Balance Sheet: A financial statement documenting a company’s assets, liabilities, and equity.
- Solvency: The ability of an insurance company to meet its long-term financial obligations.
Frequently Asked Questions
What is the purpose of Commissioner’s Values?
To maintain uniformity and accuracy in the financial reporting of insurance companies, thus ensuring regulatory compliance and investor trust.
Who publishes the Commissioner’s Values?
The National Association of Insurance Commissioners (NAIC) annually publishes this list.
Are Commissioner’s Values used globally?
Primarily used within the U.S. insurance industry as mandated by NAIC, though similar practices exist in other jurisdictions.
Questions and Answers
Why do insurance companies need Commissioner’s Values?
Insurance companies require Commissioner’s Values to record accurately the worth of their investments and to comply with regulatory standards established by NAIC.
How often are Commissioner’s Values updated?
They are published and updated annually by the NAIC.
Exciting Facts
- The NAIC’s first list of Commissioner’s Values was published over a century ago to bring stability and uniformity to the insurance industry.
- Commissioner’s Values help protect consumers by ensuring that insurance companies maintain solid financial footing.
Quotations
- “Financial transparency isn’t about convenience; it’s about confidence.” – Jane Maxwell
Proverbs
- “A penny saved is a penny earned,” reflective of accurate financial reporting and valuation.
Humorous Sayings
- “Counting chickens before they hatch is an insurance risk; value them rightly!”
Government Regulations
- Statutory Accounting Principles Statements of Concepts and Statutory Accounting Principles (SAP)][SAP): Governs how Commissioner’s Values should be reported.
Suggested Literature and Sources for Further Studies
- Statutory Accounting Principles published by the NAIC.
- Financial Statements Guide for Insurance Companies by Ernst & Young.
- Principles of Insurance by George E. Rejda and Michael McNamara.
Inspirational thought-provoking humorous farewell: Remember, while it’s important to know the value of tomorrow’s securities today, don’t forget to live and laugh in the present. Jane Maxwell signing off with a smile! 😄📊
