Description: Discussion of the establishment of deferred tax assets or liabilities under Statutory codification

Description: This paper will provide demonstrations of the following three statements: That the calculation of principles-based reserves should ignore federal income taxes That the currently required statutory deferred tax calculation would need to be changed to permit an appropriate deferred tax asset to accompany such reserve so that the result can be correctly principles-based on a post-tax basis That the Tax DAC, pursuant to Section 848 of the Internal Revenue Code, is effectively a negative tax reserve.

Description: This paper develops an analytical method for evaluating the utility of tax-planning activities that cause initial statutory surplus strain and expands the horizon beyond normal pricing applications to the evaluation of other activities requiring the initial investment of statutory surplus.