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Steve W. Kinion, Esq.
(217) 525-0700 x108


U.S. insurance company direct investments in cryptocurrencies is in its infancy and may stay that way.  In large part this is due to cryptocurrencies being non-admitted assets.  Cryptocurrencies are not cash under Statement of Statutory Accounting Principles (SSAP) No. 2R,[1] because cryptocurrencies are not a medium of exchange that a bank or other similar financial institution will accept for deposit and allow an immediate credit to the depositor’s account.  In April 2021, the Statutory Accounting Principles (E) Working Group (SAPWG) determined that if an insurer directly invests in cryptocurrencies, the investment is non-admitted.  In contrast, indirect investment via mutual funds or exchange traded funds is admitted.

Cryptocurrency is a digital or virtual currency.  It is intended to provide many of the same functions as currencies such as the U.S. dollar, but without a government’s backing.  The purported benefits offered by cryptocurrencies include (1) the ability to make transfers without an intermediary and without geographic limitation, (2) finality of settlement, (3) lower transaction costs compared to other forms of payment and (4) the ability to publicly verify transactions.[2]  Cryptocurrency is based on blockchain technology which allows the creation and editing of certifiable and permanent transactional records.  

Today there are approximately 4,000 different cryptocurrencies available on about 200 different cryptocurrency exchanges.  Cryptocurrencies have seen significant price volatility and have experienced an extreme increase in value nearing $1 trillion as of February 2021.[3] 

The SAPWG’s initial discussion was to only consider insurers directly investing in cryptocurrencies and not indirect investments via cryptocurrency mutual funds.  This reveals a distinction between what is an admitted versus non-admitted asset.  SSAP No. 30R[4] does not limit an insurer’s investments in mutual funds.  If the insurer invests in a Securities and Exchange Commission (SEC) registered fund, such as an exchange traded fund, the statutory accounting guidance is to follow SSAP No. 30R.  Specifically, SSAP No. 30R’s paragraph 4(c) and (d) includes SEC registered funds regardless of the fund’s mix or type of securities owned.  The reporting of this investment would be in Schedule D, Part 2, Section 2 (Common Stocks) of the annual statement. 

If the cryptocurrency fund is not SEC registered, then per SSAP No. 48,[5] the investment receives treatment as a private fund or joint venture, which results in reporting in Schedule BA of the annual statement.  Whether the fund is SEC registered or not, an insurer may indirectly invest in cryptocurrencies via purchasing mutual fund shares and report the investment as an admitted asset so long as the reporting complies with SSAP No. 30R or 48. 

The use of cryptocurrencies within the insurance industry is gaining interest primarily in two forms.  The first is offering the policyholder the flexibility to pay and be paid how they want.  In May 2021, Metromile, Inc., whose platform is selling automobile insurance on the pay-per-mile basis, announced that it will allow policyholders the option to pay for insurance and receive payment for eligible and approved insured claims in bitcoin or dollars.  It purchased $10 million in bitcoin for its general asset account.  Metromile claims it will be the first insurance company to both accept premiums and pay claims in cryptocurrency.[6] 

The second form is investment diversity.  In December 2020, the Wall Street Journal reported that MassMutual purchased $100 million of bitcoin for its general asset account.[7]  Considering that MassMutual’s general asset account as of September 30, 2020 was valued at $235 billion, the $100 million purchase is small.  Nevertheless, it reflects a strategy to take advantage of new opportunities while remaining diversified.

The speculative but volatile nature of cryptocurrencies makes them both an intriguing, but unusual fit for an insurer’s investment portfolio.  As long as cryptocurrencies are not considered cash, they will not be admitted assets under statutory accounting.  However, some insurers are deciding the growing accessibility to cryptocurrencies, customer demand, and the potential profit they present, make them both a form of premium and worthy investment.


[1] National Association of Insurance Commissioners (NAIC), Statutory Statement of Accounting Principles (SSAP) No. 2R - Cash, Cash Equivalents, Drafts, and Short-Term Investments, Mar. 2021.

[2] Securities and Exchange Commission, Statement on Cryptocurrencies and Initial Coin Offerings, Dec. 11, 2017, SEC.gov_ Statement on Cryptocurrencies and Initial Coin Offerings.pdf 

[3]NAIC, Interpretation of Statutory Accounting Principles Working Group, INT 21-01T: Accounting for Cryptocurrencies, Mar. 15, 2021.

[4] NAIC, SSAP No. 30R – Unaffiliated Common Stock, Mar. 2021.

[5] NAIC, SSAP No. 48 – Joint Ventures, Partnerships and Limited Liability Companies, Mar. 2021.

[6] Metromile Home Page, Metromile Plans to Adopt Bitcoin to Offer Drivers More Choice, May 6, 2021,premiums%20and%20payment%20of%20claims, pdf.

[7] Paul Vigna, MassMutual Joins Bitcoin Club with $100 Million Purchase, Wall Street J., Dec. 10, 2020.