Liabilities are obligations a company owes to others, including TDA contractholders. Capital and Surplus is the excess of Admitted Assets over Liabilities, as shown in the statutory financial statements. Comparisons of the Admitted Assets to Capital and Surplus ratios can be made among companies with similar amounts of Admitted Assets. A lower ratio means that a larger portion of the admitted assets represented by Capital and Surplus and, theoretically, implies that a company is stronger. Also, looking at the three-year trend can indicate how consistent a company's operations have been.
Drastic changes are cause for further investigation.
There may be good reasons for the changes, but it is good to know those reasons. Premium Volume is also required to be reported on the statutory financial statement. This is the total of all contributions to the company form all types of business, including insurance policy premiums as well as TDA and other annuity deposits. An insurance company will generally invest its cash assets in a portfolio of investments that includes stocks, bonds, real estate, and mortgages. The company will typically diversify its portfolio to include investments with varying levels of risk, at least within a range.