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Separate Accounts


Last Updated: 12/21/2023
A “separate account” is a separate set of financial statements held by a life insurance company, maintained to report assets and liabilities for specific products that are separated from the insurer's general account. The product features in a separate account can vary, but at a high-level, a separate account will commonly include what can be broadly described as the investment portion of a variable annuity or a life insurance product. (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.


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 are required for separate products that are “insulated” or “not insulated” from the general account creditors. When completing the separate account filing for insulated products, the reporting entity only includes those assets that are legally insulated by state law or statute. For these accounts, state law provides legal protection to the separate account contract holder from the general account liabilities.
  • Separate account filings include additional information 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 them.
    • 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 contractholder also requires 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 contractholder. 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.


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