AIG 2012 Annual Report Download - page 331

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20. STATUTORY FINANCIAL DATA AND RESTRICTIONS
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The following table presents statutory surplus and net income (loss) for our property casualty and life
insurance and retirement services operations in accordance with statutory accounting practices:
At December 31,
Statutory surplus(a):
Property casualty(b) $ 40,215
Life insurance and retirement services 14,184
Years Ended December 31,
Statutory net income (loss)(a)(c):
Property casualty $ 2,330 $ 471
Life insurance and retirement services 797 794
(a) Excludes discontinued operations and other divested businesses. Statutory surplus and net income (loss) with respect to foreign operations are
estimated at November 30.
(b) The 2011 amount was increased by $917 million for Property casualty and decreased $267 million for Life insurance and retirement services.
(c) Includes catastrophe losses (property casualty) and Net realized capital gains and losses.
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, 2012, 2011 and 2010, statutory capital of our insurance subsidiaries exceeded minimum company
action level requirements.
Subsidiary Dividend Restrictions
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Payments of dividends to us by our insurance subsidiaries are subject to certain restrictions imposed by regulatory
authorities. With respect to our domestic insurance subsidiaries, the payment of any dividend requires formal notice
to the insurance department in which the particular insurance subsidiary is domiciled. For example, unless permitted
by the New York Superintendent of Insurance, property casualty companies domiciled in New York may not pay
dividends to shareholders that, in any 12-month period, exceed the lesser of ten percent of such company’s statutory
policyholders’ surplus or 100 percent of its ‘‘adjusted net investment income,’’ as defined. Generally, less severe
restrictions applicable to both property casualty and life insurance companies exist in most of the other states in
which our insurance subsidiaries are domiciled. Under the laws of many states, an insurer may pay a dividend
without prior approval of the insurance regulator when the amount of the dividend is below certain regulatory
thresholds. Other foreign jurisdictions may restrict the ability of our foreign insurance subsidiaries to pay dividends.
There are also various local restrictions limiting cash loans and advances to us by our subsidiaries. Largely as a
result of these restrictions, approximately 92 percent of the aggregate equity of our consolidated insurance operations
was restricted from transfer to AIG Parent at December 31, 2012. We cannot predict how regulatory investigations
may affect the ability of our regulated subsidiaries to pay dividends.
To our knowledge, no AIG insurance company is currently on any regulatory or similar ‘‘watch list’’ with regard to
solvency.
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AIG 2012 Form 10-K314
$ 40,111
14,692
$ 3,855
3,827
(in millions) 2012 2011 2010
ITEM 8 / NOTE 20. STATUTORY FINANCIAL DATA AND RESTRICTIONS