XML 96 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Statutory Net Income and Surplus and Dividend Restrictions (text)
12 Months Ended
Dec. 31, 2013
StatutoryDisclosure[Abstract]  
StatutoryDisclosureTextBlock

8.       STATUTORY NET INCOME AND SURPLUS AND DIVIDEND RESTRICTIONS

The Company is required to prepare statutory financial statements in accordance with accounting practices prescribed or permitted by the State of Arizona Insurance Department. Prescribed statutory accounting practices include publications of the NAIC, as well as state laws, regulations and general administrative rules. Statutory accounting practices primarily differ from U.S. GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions and valuing investments, deferred taxes and certain assets on a different basis.


Statutory net income of the Company amounted to
$406 million, $217 million and $177 million, for the years ended December 31, 2013, 2012 and 2011, respectively. Statutory surplus of the Company amounted to $443 million and $448 million at December 31, 2013 and 2012, respectively.

 

The Company is subject to Arizona law which limits the amount of dividends that insurance companies can pay to its stockholder. The maximum dividend, which may be paid in any twelve month period without notification or approval, is limited to the greater of 10% of statutory surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations, there is a capacity to pay a dividend of $143 million after December 16, 2014, without prior approval.

 

On December 16, 2013 and June 26, 2013, the Company paid dividends of $100 million and $184 million, respectively, to its parent, Prudential Annuities, Inc. On December 11, 2012 and June 29, 2012, the Company paid dividends of $160 million and $248 million, respectively, to Prudential Annuities, Inc. On November 29, 2011 and June 30, 2011, the Company paid dividends of $318 million and $270 million, respectively, to Prudential Annuities, Inc.