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We also, from time to time - because we're active in these specialty product lines, where others lack our expertise - outsource our unique claims capabilities. If, ultimately, the customer fails to do so, then we'll place insurance on that risk and charge it to the loan. They, therefore, want to make sure there are sufficient assets available to pay all legitimate claims in the event of a serious occurrence. An insurance regulator or rating agency's primary job is to be sure that policyholders will be compensated in the event of a loss. Few people understand statutory accounting, which is the regulatory standard of the insurance industry. Most people are familiar with GAAP accounting.

It doesn't help that we're actually required to keep two sets of books in the insurance industry. It creates a mystique and a confusion surrounding the industry, which can result in a certain amount of consumer distrust. This can really complicate things. Additionally, we will take our capabilities to other insurance companies who want to be able to offer their agents our product lines but don't necessarily have the in-house expertise to do so themselves. Our industry is complicated on so many levels. Nevertheless, the fact that we are required to keep a second set of books in the insurance industry is confusing. Statutory accounting is designed to facilitate such critical analysis.