New York Insurance Superintendent Eric Dinallo notified insurersyesterday that exceptions from capital and surplus accountingstandards granted by other states must not be reflected in New Yorkfinancial statements they must file by March 1.

His announcement in a formal bulletin follows action byConnecticut, Indiana and Iowa, which have used permitted practiceprocedure to grant rules waivers to a number of companies seekingwaivers of capital and surplus requirements.

Mr. Dinallo's bulletin, circular letter No. 4,http://www.ins.state.ny.us/circltr/2009/cl09_04.htm, said thatforeign insurers, those not domiciled in New York, must adjusttheir statements to reflect New York accounting practices.

Mr. Dinallo noted that New York's financial statementrequirements allow the state to monitor companies' "strength andsolvency" and create "a level playing field for all insurers" thatallows consumers to compare different companies.

The superintendent was among a group of regulators opposingrelaxation of capital and surplus requirements, when a panel of theNational Association of Insurance Commissioners voted 16-1 lastmonth against a proposal advanced by life insurers seeking relieffrom the standards.

The New York bulletin was praised by The Consumer Federation ofAmerica and the Center for Economic Justice.

"The New York Insurance Department and its Commissioner, EricDinallo, deserve praise from consumers across the nation forhelping them see through a maze of accounting changes and makebetter decisions on purchase and maintenance of life and annuitypolicies," said CFA Insurance Director J. Robert Hunter, the CFAinsurance director.

The CFA and CEJ noted some states were allowing some insurancecompanies to alter reporting of capital, assets and reserves "thatguarantee that consumers' claims and benefits under the insurancepolicies will be paid.

Under some of these "permitted practices," insurers can, forexample, now count more expected future tax credits ("deferred taxassets") as part of their required capital - even though thesedeferred tax assets do not represent real money available to payclaims and benefits, said the statement from the two groups.

The organizations said consumers in all states should review notonly the Annual Statement filed in their home state, but the AnnualStatement from New York as well to compare the 2007 data from lastyear with the 2008 data as filed in New York.

"In that way, consumers will be able to compare the insurer onan 'apples to apples' basis without the distortion introduced byactions of several states," they said.

"We do note that many insurers do not do business in New Yorkand a consumer might not be able to determine, in that instance, ifa permitted practice is adversely impacting their insurer," the CFAand CEJ advised.

This article was updated 4:19 p.m.