Defined terms for the annuity market and lifetime income landscape.
State insurance department is the state-level government agency that regulates insurance companies and insurance products — including annuities — within its state, with primary regulatory authority over licensing, solvency oversight, market conduct, and consumer protection.
State insurance regulation is the system under which each U.S. state — rather than the federal government — licenses insurance carriers, regulates the annuity and insurance products they sell, monitors their financial condition, and handles carriers in distress.
Status quo bias is the tendency for individuals to prefer the current state of affairs to any change from it, so that maintaining an existing arrangement is chosen even when a different arrangement would be selected on its merits.
Statutory accounting principles, often shortened to SAP, are the specialized accounting standards that US insurance carriers use for the financial statements they file with state insurance regulators, designed to measure a carrier's solvency rather than its profitability.
Statutory surplus is the amount by which an insurance carrier's admitted assets exceed its statutory liabilities, representing the regulatory capital cushion that supports new business, absorbs adverse experience, and determines the carrier's capacity to write and back new contracts.
