SAP–GAAP Surplus Bridge

Bridge GAAP equity to statutory surplus using supplied adjustments.

Description

A GAAP-to-statutory surplus bridge adds signed accounting adjustments to supplied equity.

A GAAP-to-statutory surplus bridge adds signed accounting adjustments to supplied equity. Adjustment direction must already reflect the intended accounting treatment.^[1]

Bridge GAAP equity to statutory surplus using supplied adjustments.

When to use SAP–GAAP Surplus Bridge

Use this tool to bridge GAAP equity to statutory surplus using supplied adjustments.

Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.

How to use SAP–GAAP Surplus Bridge and understand its results

Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
Enter gaapEquity, nonadmittedAssetAdjustment, reserveAdjustment, otherStatutoryAdjustments using the field table and calculation rules, then run the tool.
Read totalStatutoryAdjustments, statutorySurplus, surplusDifference. The explanation below defines the units, signs, ordering and any flags or placeholder values.
If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.

Input field	Meaning	Value type; see rules below	Requirement
gaapEquity	GAAP equity	number; minimum: 0	Required
nonadmittedAssetAdjustment	Nonadmitted asset adjustment	number	Required
reserveAdjustment	Reserve adjustment	number	Required
otherStatutoryAdjustments	Other statutory adjustments	number	Required

Enter nonnegative GAAP equity and finite signed adjustments. Return total adjustments, statutory surplus and surplus difference, which equals the adjustment total. Negative surplus is allowed.

adjustments=asset+reserve+other; surplus=equity+adjustments

Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.

Output field	Meaning	Value type
totalStatutoryAdjustments	Total statutory adjustments	number
statutorySurplus	Statutory surplus	number
surplusDifference	Statutory minus GAAP surplus	number

json

{
  "input": {
    "gaapEquity": 1000,
    "nonadmittedAssetAdjustment": -100,
    "reserveAdjustment": -50,
    "otherStatutoryAdjustments": 20
  },
  "output": {
    "totalStatutoryAdjustments": -130,
    "statutorySurplus": 870,
    "surplusDifference": -130
  }
}

Limitations and assumptions

No statements, admissibility rules, reserves or accounting compliance are verified.

Numeric inputs must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.

Alternative or Complementary methods

Use RBC Action Level: Compare an insurer RBC ratio with caller-supplied action thresholds. For a complementary task, use PML Aggregation: Aggregate modeled occurrence losses into a caller-parameterized PML.

References

SAP–GAAP Surplus Bridge — tool.io

Similar or alternative tools

RBC Action Level
Compare an insurer RBC ratio with caller-supplied action thresholds.
PML Aggregation
Aggregate modeled occurrence losses into a caller-parameterized PML.