Home & Auto Insurance Company (a capital stock company) is a three-year-old personal lines insurer. The company has been growing rapidly due in equal parts to unique policy provisions and competitive rates. The company has been working with insurance departments to become admitted into new states while hiring new underwriters and adjusters. The Home & Auto Insurance Company senior leadership is concerned that the state financial reporting regulations unique to insurance products will hamper growth and allow its competitors to catch up with them by using similar unique policy provisions. You are a member of the Home & Auto Insurance Company senior leadership team and have been asked to explain to the board of directors, using balance sheet and income statement terminology, the reason for the statutory issue and your recommended solution to the problem.