Principles required by statute which must be followed by an insurance company when submitting its financial statements to the various state insurance departments. Such principles differ from the Generally Accepted Accounting Principles (GAAP).

Rules of financial computation and presentation required by statute which must be followed by an insurance company when submitting its financial statements to state insurance departments. Such principles differ from Generally Accepted Accounting Principles (GAAP).

The set of accounting principles upon which an insurance company's annual statement is required to be based for presentations to state regulatory authorities. Unlike Generally Accepted Accounting Principles (GAAP), SAP is based on a liquidation concept which assumes that the company could be forced to terminate its business operations immediately, at any given time, and therefore views the value of the company's assets in liquidation versus its debt.