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Statutory Balances And Accounting Practices
 12 Months Ended
Dec. 31, 2011
Statutory Balances And Accounting Practices [Abstract]  
Statutory Balances And Accounting Practices

13. Statutory Balances and Accounting Practices

The Insurance Companies prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance departments of the applicable states of domicile. Prescribed statutory accounting practices primarily include those published as statements of SAP by the NAIC, as well as state laws, regulations, and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. As of December 31, 2011, there were no material permitted statutory accounting practices utilized by the Insurance Companies.

The following table presents the statutory net income and capital and surplus of the Insurance Companies, as reported to regulatory authorities:

 

     Year Ended December 31,  
     2011      2010     2009  
     (Amounts in thousands)  

Statutory net income(1)

   $ 223,447       $ 142,981      $ 186,995   

Statutory capital and surplus(2)

     1,497,609         1,322,270 (2)      1,517,864   

(1)

Statutory net income excludes changes in the fair value of the investment portfolio as a result of the application of fair value option.

(2)

The decrease in statutory capital and surplus in 2010 was primarily due to a $270 million extraordinary intercompany dividend declared by MCC in the fourth quarter of 2010. The dividend was paid to Mercury General in 2011.

The statutory capital and surplus of each of the Insurance Companies exceeded the highest level of minimum regulatory required capital.