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Iowa’s insurance commissioner has instituted a temporary accounting rule change that relaxes capital and surplus requirements for some insurance companies in the state, enabling them to boost the amount they can claim as capital reserves.

Earlier this month, Insurance Commissioner Susan Voss authorized the rule, known as a permitted practice, which has since been approved for 11 insurers, among them Principal Life Insurance Co. and subsidiaries of FBL Financial Group Inc.

Don Seibel, vice president of finance for FBL, said existing regulatory provisions for the accounting of deferred tax assets were unduly restrictive, “so we decided to adopt the permitted practice because we wanted to best portray the financial position of the companies.”

Farm Bureau Life Insurance Co. and EquiTrust Life Insurance Co., both FBL operating subsidiaries, each gained $20 million in additional reserves from the permitted practice, Seibel said. Farm Bureau Mutual Insurance Co., a property-casualty company under FBL management, added $3.8 million to its reserves. Farm Bureau Life holds about $385 million of capital in surplus, while EquiTrust has approximately $417 million in reserves and Farm Bureau Mutual has about $575 million.

The rule change provides a more accurate picture of insurers’ finances, said Voss, who did not have a total for the amount of capital it freed up for the companies. “It can’t be used to shore up the position of the company,” she said, noting that each of the insurers using the permitted practice significantly exceeds minimum capital requirements. “Obviously, the companies that are getting this aren’t in some financial peril.”

The other companies approved were Aviva Life and Annuity Co., CUMIS Insurance Society Inc., CUNA Mutual Insurance Society, ING Annuity and Life Insurance Co., Midland National Life Insurance Co., North American Company for Life and Health Insurance and TransAmerica Life Insurance Co.

No additional insurance companies will be able to apply for the permitted practice, Voss said, because companies must file their annual reports by the end of February. No companies were denied requests, but some withdrew their applications after seeing an outline of the requirements, she said. The temporary measure expires Dec. 15, but could be renewed by Voss.

The National Association of Insurance Commissioners, on which Voss serves as vice president, last month denied a request from the American Council of Life Insurers (ACLI) that would have allowed insurers in every state to adopt accounting standards that allow for less stringent capital requirements.