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Research on State Farm Insurance Co.

In: Business and Management

Submitted By shw82
Words 534
Pages 3
Research on State Farm Insurance Co.
Since State Farm specializes in insurance, funds and financial services, the “investment” section on the financial statement is very different from other companies’. The financial documents in sec are also different and hard to understand. So the analysis I made in here may not be accurate.
Firstly, I want to talk about some background information about State Farm, State Farm Variable Product Trust (the “Trust”) has nine separate investment portfolios (each a “Fund” and together, the “Funds”). Each Fund has its own investment objective, investment policies, restrictions, and attendant risks and is diversified as defined in the Investment Company Act of 1940.
When I read through the company’s 2014 Annual Report, I didn’t find any available – for – sale securities or cost method securities. The company used fair- value method to value all of its investment. Investments are valued at fair value pursuant to valuation procedures approved by the Trust’s Board of Trustees (the “Board”). The valuation procedures assign to SFIMC the responsibility for determining fair value using the processes and factors as outlined in the valuation procedures. Fair value price is the price that the Funds would receive by selling an asset or by paying to transfer a liability in an orderly transaction between market participants at the measurement date The Board or the Executive Committee of the Board will determine fair value if SFIMC cannot determine fair value based on the valuation procedures. State Farm used IFRS three-tier hierarchy to classify fair value measurements for disclosure purposes. I want to specifically mention the first level inputs. The first level is unadjusted quoted prices in active markets that are accessible to the Funds for identical assets or liabilities. I think that the new FASB policy will somewhat affect inputs in this…...

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