Regulatory Alerts2002-09-10
Regulation (NAP) - Valuation Criteria
The Central Bank of S. T. P. establishes binding valuation criteria for insurance companies, mandating monthly accounting adjustments to asset and liability values based on continuity, consistency, specialization, historical cost, and conservatism principles. The regulation requires foreign currency balances to be adjusted using the Central Bank's average exchange rate, securities to be valued at historical cost or stock exchange quotations (whichever is lower), and misaligned real estate or artistic assets to undergo periodic independent appraisals. Additionally, it dictates that unrealized gains and losses from these revaluations must be separately provisioned or recognized without mutual offset, remaining restricted to distribution until the underlying assets are sold.