Physicians Insurance Company of Wisconsin, Inc. and Subsidiaries - Page 5




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          Annual Statement Requirements                                               
               Since its incorporation, petitioner has been regulated by              
          the Wisconsin Commissioner of Insurance (WCI).  The WCI is                  
          responsible for, among other things, examining financial                    
          practices and market conduct of Wisconsin insurance companies.              
          Petitioner is required to file annual statements with the WCI and           
          to deliver each year a statement of actuarial opinion regarding             
          the adequacy of its reserves.                                               
               The National Association of Insurance Commissioners (NAIC),            
          an organization of State insurance commissioners, promulgates               
          standard forms for insurance companies to use in preparing their            
          annual statements.  Insurance companies are required to prepare             
          their annual statements using a system of accounting known as the           
          statutory or annual statement method, which does not necessarily            
          conform to generally accepted accounting principles that govern             
          the preparation of an insurance company’s financial statements.             
          Annual statement reporting requires insurance companies to                  
          estimate their unpaid losses as of the close of each calendar               
          year.  These estimates of unpaid losses are intended to reflect             
          the insurer’s liability for future payments on incurred claims,             
          which include insured events for which a claim has been filed               
          (reported losses) as well as insured events for which no claim              
          has yet been filed (incurred but not reported losses).                      








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Last modified: May 25, 2011