Statutory Financial Information

12 Months Ended

Dec. 31, 2012

Statutory Financial Information [Abstract]

Our subsidiaries file financial statements prepared in accordance with statutory accounting practices prescribed or permitted by insurance regulators. Statutory accounting differs from GAAP in the reporting of certain reinsurance contracts, investments, subsidiaries, acquisition expenses, fixed assets, deferred income taxes, and certain other items. Our international subsidiaries prepare statutory financial statements based on local laws and regulations. Some jurisdictions impose complex regulatory requirements on insurance companies while other jurisdictions impose fewer requirements. In some countries, we must obtain licenses issued by governmental authorities to conduct local insurance business. These licenses may be subject to reserves and minimum capital and solvency tests. Jurisdictions may impose fines, censure, and/or criminal sanctions for violation of regulatory requirements.

ACE's insurance and reinsurance subsidiaries are subject to insurance laws and regulations in the jurisdictions in which they operate. These regulations include restrictions that limit the amount of dividends or other distributions, such as loans or cash advances, available to shareholders without prior approval of the insurance regulatory authorities. The amount of dividends available to be paid in 2013 without prior approval for our U.S. and International subsidiaries totals $762 million and $2.1 billion, respectively.

The statutory capital and surplus of our insurance subsidiaries met regulatory requirements for 2012, 2011, and 2010.

The following tables present the combined statutory capital and surplus and statutory net income of the U.S. and International subsidiaries:



					December 31
(in millions of U.S. dollars)			2012		2011
Statutory capital and surplus
U.S. Subsidiaries			$	6,037	$	5,858
International Subsidiaries			$	18,317	$	15,565

	Years Ended December 31
(in millions of U.S. dollars)	2012		2011		2010
Statutory net income
U.S. Subsidiaries	$	619	$	702	$	1,025
International Subsidiaries	$	2,118	$	1,214	$	2,592

Several insurance subsidiaries follow accounting practices prescribed or permitted by the jurisdiction of domicile that differ from the applicable NAIC or local statutory practice. The application of prescribed or permitted accounting practices does not have a material impact on ACE's statutory surplus and income. As prescribed by the Restructuring discussed previously in Note 7, certain of our U.S. subsidiaries discount certain A&E liabilities, which increased statutory capital and surplus by approximately $161 million and $192 million at December 31, 2012 and 2011, respectively.