Exposure Drafts Outstanding
Statutory Accounting Principles Working Group
Last Updated June 14, 2017

Please address comment letters to Dale Bruggeman, Chair of the Statutory Accounting Principles (E) Working Group, and direct to Julie Gann, Robin Marcotte, Fatima Sediqzad and Jake Stultz.

SUBSTANTIVE AND NONSUBSTANTIVE EXPOSURES

Ref No. Issue Paper/ SSAP No./ Appendix Title Description
EXPOSURES With COMMENT DEADLINE OF JUNE 16, 2017

2016-03

IP No. 156

Variable Annuities

Exposure considers prior industry comments and  identifies key areas where input is requested.

2016-48

SSAP No. 86

Impact of Future Settled Premiums on the Option Valuations

Exposed agenda item to clarify liability recognition for the cost to acquire derivatives with a deferred or financing premium, as well as to provide disclosures and specific reporting for these premiums. Industry was requested to provide an illustrated Schedule DB to identify proposed revisions to capture information on these derivative structures.

2017-04

SSAP No. 86

Settlement of Variation Margin

Requested input on the legal settlement impact related to variation margins.

EXPOSURES With COMMENT DEADLINE OF JULY 7, 2017

2016-41

SSAP No. 26

AVR and IMR in SSAP No. 26

Exposed proposed revisions to clarify recognized losses from OTTI shall be recorded entirely to AVR or IMR in accordance with provisions of the annual statement instructions.

2017-13

SSAP No. 26

ASU 2017-08 – Premium Amortization on Purchased Callable Debt Securities

Exposed revisions to reject ASU 2017-08 and retain the statutory accounting provisions of “yield-to-worse” for callable debt securities.

 

There are no advance materials at this time.

Subsidiary, Controlled or Affiliated (SCA)

INT 15-01: Risk Corridors Collectibility

Relating SVO Unit Prices to the Fair Value Hierarchy

Structured Securities

Accounting Practices and Procedures Manual Updates

SSAP No. 43R flowchart

SAPWG Maintenance Agenda Submission Form (Form A)
See Policy Statement on SAPWG Maintenance Agenda Process for description and instruction. After completion of the Form A, please send to NAIC staff via email (see contact information below) for review. NAIC staff will send a confirmation of receipt. In order for NAIC staff to place the Form A on the Agenda, the Form A must be received no later than the comment deadline.

Maintenance Agenda
Updated May 5, 2017

SAP to Annual Statement Disclosure Checklist Updated for 2016 Annual Statements
Updated 1/31/2017

Please note, in an effort to go green, the spreadsheets are spaced to view the entire width on a computer screen. At other percentages or if printing, some detail may be lost.

Policy Statements
See Appendix F – Policy Statements of the Accounting Practices and Procedures Manual for a complete listing.

 

Education & Training Events

Related NAIC Publications

Contacts

Statutory Accounting Principles (E)
Working Group

The Statutory Accounting Principles (E) Working Group is responsible for developing and adopting substantive, nonsubstantive and interpretation revisions to the NAIC Accounting Practices and Procedures Manual (AP&P Manual). The AP&P Manual provides the basis for insurers to prepare financial statements for financial regulation purposes.

Substantive statutory accounting revisions introduce original or modified accounting principles. Substantive revisions can be reflected in an existing Statement of Statutory Accounting Principles (SSAP) or a new SSAP. Nonsubstantive statutory accounting revisions are characterized as language clarifications that do not modify the original intent of a SSAP. SSAPs are considered the highest authority (Level 1) in the statutory accounting hierarchy.

An interpretation to an existing SSAP may be developed to provide timely application, interpretation or clarification guidance. Revisions classified as an interpretation shall not amend, supersede or conflict with existing, effective SSAPs. Interpretations are considered the second highest authority (Level 2) in the statutory accounting hierarchy.

Items for consideration by the Working Group can be submitted via a SAPWG Maintenance Agenda Submission Form (Form A) to the NAIC staff support listed on this Web page.

2017 Adopted Committee Charges
  1. Maintain codified statutory accounting principles by providing periodic updates to the guidance that address new statutory issues and new generally accepted accounting principles (GAAP) pronouncements. Provide authoritative responses to questions of application and clarifications for existing statutory accounting principles. Report all actions and provide updates to the Accounting Practices and Procedures (E) Task Force.

  2. At the discretion of the chair, develop comments on exposed GAAP and International Financial Reporting Standards (IFRS) pronouncements affecting financial accounting and reporting. Any comments are subject to review and approval by the chairs of the Accounting Practices and Procedures (E) Task Force and the Financial Condition (E) Committee.

  3. Coordinate with the Life Actuarial (A) Task Force on changes to the Accounting Practices and Procedures Manual related to the Valuation Manual VM-A, Requirements, and VM-C, Actuarial Guidelines, as well as other Valuation Manual requirements. This process will include the receipt of periodic reports on changes to the Valuation Manual on items that require coordination.

  4. Obtain, analyze and review information on permitted practices, prescribed practices or other accounting treatments suggesting that issues or trends occurring within the industry may compromise the consistency and uniformity of statutory accounting, including but not limited to activities conducted by insurers for which there is currently no statutory accounting guidance or where the states have prescribed statutory accounting that differs from the guidance issued by the NAIC. Utilize this information to consider possible changes to statutory accounting.

  5. Develop specific statutory accounting guidance for certain limited derivative contracts hedging variable annuity guarantees, subject to fluctuations as a result of interest rate sensitivity, reserved for in accordance with Actuarial Guideline XLIII—CARVM for Variable Annuities (AG 43). This guidance shall place an emphasis on reducing non-economic surplus volatility for these specific hedges in situations where strong risk-management is in place, with safeguards to ensure appropriate financial statement presentation and disclosures, sufficient transparency, and regulatory oversight. This charge shall be a high priority, with the earliest effective date feasible that allows for adequate development of guidance and related reporting schedules.

  6. Consider whether current or future changes to reserves resulting from implementation of the Variable Annuities Framework for Change will be reported in the annual financial statement as a “change in basis.”

The following Subgroup reports to the Statutory Accounting Principles Working Group:

For revisions adopted by the Working Group, please refer to the Accounting Practices and Procedures Manual Updates Web page