Iowa using permitted practice procedure, which allows for ruleswaivers, has approved 10 insurance companies for capital andsurplus relief under a Feb. 3 bulletin it issued temporarilyrelaxing requirements for deferred tax assets.

The firms that applied for and were granted relief under thebulletin, according to Tom Alger, department spokesperson,include:

o Aviva Life & Annuity, Des Moines

o CUMIS Insurance Society, Waverly

o Principal Life, Des Moines

o Farm Bureau Mutual, West Des Moines

o Farm Bureau Life, West Des Moines

o CUNA Mutual Ins. Society, Waverly, Iowa

o Midland National Life Ins. Co., Des Moines

oTransamerica Life Ins. Co., Cedar Rapids, Iowa

o North American Co. Life & Health Ins. Co. West DesMoines

o ING Annuity & Life Ins. Co., Des Moines

The bulletin issued by the Iowa insurance department changes thetime horizon for realizing deferred tax assets from one to threeyears, or 15 percent rather than 10 percent of statutory capitaland surplus.

It requires a company to file a request for such treatment. Theallowance in the bulletin runs from Dec. 31, 2008 through Dec. 15of this year. For the full text of the bulletin seehttp://www.iid.state.ia.us/docs/bull0901.pdf.

Pennsylvania Insurance Commissioner Joel Ario said that as ofFeb. 18, the Pennsylvania department has not received any requestsfor capital and surplus relief using permitted practices.

Mr. Ario said that the use of permitted practices is not areversal of the Jan. 29 vote by the National Association ofInsurance Commissioners NAIC against a proposal by life insurers togrant capital and surplus relief to companies.

"Everyone realizes that this is an unusual year," and there willbe greater use of permitted practices than is usual, hecommented.

Mr. Ario said that after the NAIC voted 16-1 on Jan. 29 not toapprove a scheme for capital and surplus relief advanced by lifeinsurers, he received a general call from an industryrepresentative asking how his department would handle theissue.

He said that he responded that companies could approach thedepartment and their requests would be reviewed on a case-by-casebasis. In any given year, individual companies in any line ofbusiness can approach the department if there are uniquesituations, he added.

The most common reason for the use of a permitted practice ruleto grant an exemption would be a rating downgrade of a company thatwas generally in good shape but needed specific relief with afinancial filing requirement, Mr. Ario said.

When asked whether states' use of permitted practices rulescould create a lack of uniformity, Mr. Ario replied, "It could butI hope it doesn't."

He explained that insurance commissioners want "things to be asuniform as possible regarding practices and in particular,accounting practices." However, he also noted that "any good systemallows for unique circumstances." There is a balance that needs tobe reached between flexibility and uniformity and "at what pointdoes flexibility erode uniformity."

Commissioners usually accept the decision of a domiciliarycommissioner, although they do not have to, Mr. Ario explained.

On the issue of transparency, Mr. Ario said that while companiescan come to a commissioner and request confidentiality, there istransparency in financial statements where the exception granted isnoted.

He said that it is his understanding that in several cases,financial filings will be delayed by a week or two for certaincompanies receiving relief under permitted practices.

Use of permitted practices, he said, is a balance forcommissioners who can be "second guessed." If the practices are notused and a company goes under, then there is the risk of criticismand if the practices are granted and a company is seized anyway,the question is raised about why the company wasn't taken intorehabilitation sooner, Mr. Ario added.

Other states have also used permitted practices rules to offertemporary relief to companies including Connecticut for HartfordFinancial, and Indiana for Lincoln. The Ohio department confirmed20 companies who will receive capital relief under bulletins thatthe department issued earlier this month.

The New Jersey Department of Banking and Insurance said thatthere are no plans to use permitted practices rules to offerdomiciled companies capital and surplus relief. A spokesperson forPrudential Financial, Newark, N.J., declined to comment on whetherthe company had requested such relief.