Statutory Accounting and Dividend Restrictions

12 Months Ended

Dec. 31, 2016

Statutory Accounting and Dividend Restrictions

ProAssurance’s domestic U.S. insurance subsidiaries are required to file statutory financial statements with state insurance regulatory authorities, prepared based upon statutory accounting practices prescribed or permitted by regulatory authorities. ProAssurance did not use any prescribed or permitted statutory accounting practices that differed from the NAIC's statutory accounting practices at December 31, 2016, 2015 or 2014. Differences between Net income prepared in accordance with GAAP and statutory net income are principally due to: (a) policy acquisition and certain software and equipment costs which are deferred under GAAP but expensed for statutory purposes and (b) certain deferred income taxes which are recognized under GAAP but are not recognized for statutory purposes.

The NAIC specifies risk-based capital requirements for property and casualty insurance providers. At December 31, 2016, actual statutory capital and surplus for each of ProAssurance’s insurance subsidiaries substantially exceeded the regulatory requirements. Net earnings and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table.



(In millions)
Statutory Net Earnings			Statutory Capital and Surplus
2016	2015	2014	2016	2015
$163	$168	$246	$1,403	$1,506

At December 31, 2016, $1.6 billion of ProAssurance's consolidated net assets were held at its domestic insurance subsidiaries, of which approximately $174 million are permitted to be paid as dividends over the course of 2017 without prior approval of state insurance regulators. However, the payment of any dividend requires prior notice to the insurance regulator in the state of domicile and the regulator may prevent the dividend if, in its judgment, payment of the dividend would have an adverse effect on the capital and surplus of the insurance subsidiary.