AIG 2013 Annual Report Download - page 325

The following table presents statutory capital and surplus and net income for our AIG Property Casualty and
AIG Life and Retirement operations in accordance with statutory accounting practices:
Years Ended December 31,
Statutory net income(a)(b)(c):
Property Casualty $ 4,792 2,330
Life and Retirement 3,827 797
At December 31,
Statutory capital and surplus(a)(b):
Property Casualty $ 42,208
Life and Retirement 14,683
Aggregate minimum required statutory capital and surplus(b):
Domestic Property Casualty $ 5,800
Foreign Property Casualty 10,100
Life and Retirement 4,276
(a) Excludes discontinued operations and other divested businesses. Statutory capital and surplus and net income with respect to foreign operations
are as of November 30.
(b) The 2013 amounts are subject to change based on final statutory filings. The 2012 Property Casualty statutory net income and statutory capital
and surplus amounts increased by $937 million and $2.1 billion, respectively, compared to the amounts previously reported in our Annual Report on
Form 10-K for the year ended December 31, 2012, due to finalization of statutory filings.
(c) Property Casualty includes approximately $8.0 billion and $3.0 billion of recognized statutory gains related to legal entity simplification
(restructuring) in 2013 and 2012, respectively. These recognized gains were largely offset by reductions in unrealized gains; therefore, there was no
material impact to total surplus.
Our insurance subsidiaries file financial statements prepared in accordance with statutory accounting practices
prescribed or permitted by domestic and foreign insurance regulatory authorities. The principal differences between
statutory financial statements and financial statements prepared in accordance with U.S. GAAP for domestic
companies are that statutory financial statements do not reflect DAC, some bond portfolios may be carried at
amortized cost, investment impairments are determined in accordance with statutory accounting practices, assets and
liabilities are presented net of reinsurance, policyholder liabilities are generally valued using more conservative
assumptions and certain assets are non-admitted.
At December 31, 2013 and 2012, the aggregate minimum required statutory capital and surplus of our domestic AIG
Property Casualty insurance subsidiaries was approximately $5.4 billion and $5.8 billion, respectively. At
December 31, 2013 and 2012, the aggregate minimum required statutory (or equivalent) capital and surplus of our
foreign AIG Property Casualty foreign insurance subsidiaries was approximately $8.8 billion and $10.1 billion,
respectively. Capital and surplus requirements of our foreign subsidiaries differ from those prescribed in the U.S., and
can vary significantly by jurisdiction. At both December 31, 2013 and 2012, the aggregate minimum required
statutory capital and surplus of our AIG Life and Retirement insurance subsidiaries was approximately $4.3 billion.
For domestic insurance subsidiaries, minimum required statutory capital and surplus is based on the greater of the
RBC level that would trigger regulatory action or minimum requirements per state insurance regulation. At both
December 31, 2013 and 2012, all domestic and foreign insurance subsidiaries individually exceeded the minimum
required statutory capital and surplus requirements and all domestic insurance subsidiaries individually exceeded
RBC minimum required levels.
At December 31, 2013 and 2012, the use of prescribed or permitted statutory accounting practices by our AIG
Property Casualty and AIG Life and Retirement insurance subsidiaries did not result in reported statutory surplus or
risk-based capital that is significantly different from the statutory surplus or risk-based capital that would have been
reported had National Association of Insurance Commissioners’ statutory accounting practices or the prescribed
regulatory accounting practices of their respective foreign regulatory authority been followed in all respects for
domestic and foreign insurance entities. As described further in Note 12, our domestic Property Casualty insurance
subsidiaries domiciled in New York and Pennsylvania discount non tabular workers’ compensation reserves based on
the prescribed or approved regulations in each of those states. While these practices differ from applicable National
Association of Insurance Commissioners’ statutory accounting practices, such practices do not have a material
impact on AIG Property Casualty’s statutory surplus and statutory net income or risk based capital.
19. STATUTORY FINANCIAL DATA AND RESTRICTIONS
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AIG 2013 Form 10-K 307
ITEM 8 / NOTE 19. STATUTORY FINANCIAL DATA AND RESTRICTIONS
(in millions) 2013 2012 2011
$ 12,441
3,741
$ 39,988
14,329
$ 5,425
8,821
4,336
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