Skip to main content
Separate Accounts

Last Updated 2/28/2020

A “separate account” is a separate set of financial statements held by a life insurance company, maintained to report assets and liabilities for particular products that are separated from the insurer's general account. (Separate account assets and liabilities are reported as a component of the life insurer’s general account financial statement.)  

Separate accounts were originally established in response to federal securities laws for investment-linked variable annuities. Although it took many years, the application of separate accounts has dramatically expanded beyond this simple product design. Product development has resulted with an array of “hybrid” products—products that overlay traditional insurance company guarantees (e.g., mortality, morbidity, etc.) being allocated to the separate account investment portfolio.

The use of separate accounts by insurers has evolved rapidly over the past 20 years. In response to recommendations to clarify information pertaining to separate account products and related separate account assets and liabilities, detailed statutory financial statement data and disclosures are provided regarding the products and assets captured in a separate account. While detailed in SSAP No. 56—Separate Accounts, examples of information provided include:

  • Distinct filings for separate products that are “insulated” or “not insulated” from the general account creditors. When completing the separate account filing, the reporting entity is only to include those assets that are legally insulated by state law or statute, in which the state law provides legal protection to the separate account contract holder from the general account liabilities.
  • Detailed information on the characteristics of separate account assets, specifically categorizing separate account assets in accordance with the following characteristics:
    • Identification for all separate account assets not reported at fair value, and the measurement basis used for those separate account assets.
    • Amount of separate account assets that represent seed money, other fees and expenses due to the general account and additional required surplus amounts. (Additional required surplus is defined as additional or permanent surplus that is required to be retained in the separate account in accordance with state law or regulations.) Information is reported on any current year transfers to the separate account for seed money, as well as the duration in which seed money, other fees and expenses, and additional required surplus amounts due to the general account have been held in the separate account.
    • Identification of separate account assets in which the investment directive is not determined by the contract holder. Situations in which the investment directive is not determined by the contract holder also require disclosure on whether the investments, if included in the general account, would have resulted with the reporting entity exceeding any general account investment limitations.
    • Identification of separate account assets in which less than 100% of investment proceeds are attributed to the contract holder. This also includes identification of the separate account investment income attributed to the reporting entity during the reporting period, and whether the income was transferred to the general account or reinvested within the separate account.
    • Identification of all products reported as a separate account product under statutory accounting principles, and whether the product was classified differently under U.S. GAAP. For products with different classifications between statutory accounting and U.S. GAAP, identification of the characteristics that resulted with a different classification under U.S. GAAP.

Information on separate account products with general accounting guarantees, including the amount of guarantees paid by the general account for the current reporting year, and for the previous four reporting years. This information also details the risk charges paid from the separate account to the general account related to these guarantees, and whether the risk charges are reviewed and opined upon.


Committees Active on This Topic

Additional Resources


Media queries should be directed to the NAIC Communications Division at 816-783-8909 or

Julie Gann

Assistant Director – Solvency Policy

(816) 783-8966

NAIC Center for Insurance Policy and Research (CIPR)

CIPR Homepage