The many benefits of tax process automation: STAT to tax reconciliation reporting

By: John Pavlakis

Are you using CAMRA to automate your insurance company’s processing and reporting function?  How about the CAMRA Tax basis and the SSRS tax reports - do you use them to efficiently capture and process the Tax data?

Tax reporting is a process involving data harvesting, sorting, processing, and reconciling to achieve timely and accurate reporting.  From a Tax professional’s perspective, the tax reporting process begins with various income and holdings reports.  That data is then reconciled for STAT and Tax differences and broken into its current and deferred components.

With CAMRA, you can now generate the new STAT to Tax reconciliation report (“STAT to Tax” report) - the next step in Tax reporting.  The STAT to Tax report bridges the differences between beginning STAT book value and ending Tax book value by category and by lot.  The starting point is any income or expense differences that also impact book value.  Items such as OID, discount, and premium can generate differences between STAT and Tax; those differences are identified and reconciled.  Impairments are similarly processed and reconciled.

The transactional activity related to sales, maturities, and other similar transaction types is addressed.  STAT to Tax differences in realized gains and losses, whether due to timing or permanent differences from OID, discount, premium, impairments, or foreign currency differences, are all identified and reconciled.  These STAT to Tax differences are then broken out into the current and deferred tax components.  All the manual offline downstream activity associated with this process can now be automated with the STAT to Tax report.

This concludes our four-part “Benefits of Tax Process Automation” eBriefing series.  To learn more about upgrading your current tax operations and how automation reduces risk, email John Pavlakis or call 860-298-4596.