Issue #1
There is an invalid NAIC crosscheck (LXAHN000003) on the Accident and Health Policy Experience Exhibit for Life and Fraternal April Supplements and you may see this show up in your validation reports.
Summary
The Accident and Health Policy Experience Exhibit April supplement was updated for all lines of business in 2021 and there is an invalid NAIC Crosscheck (LXAHN000003) on the Exhibit for the Life and Fraternal filers. The NAIC is aware of the issue with this validation and is not making updates for the 2021 Annual, so you may see this crosscheck show up in your validation reports.
Crosscheck per Annual Statement Instructions
What does this crosscheck mean? Accident and Health Policy Experience Exhibit (AHPEE), Line D2, Column 6 (Grand Total) should equal the Direct Incurred A&H benefits from Exhibit 8, Part 2, Line 6.1, Columns 9 + 10 + 11 less the change in A&H claim reserves from Exhibit 6, Line 14, Column 1.
Why is this an issue? The AHPEE Column 6 is Direct Incurred Claims amounts only. The amounts in Exhibit 6 for A&H claim reserves are Direct + Assumed business.
Who does this impact? Any Life customer who has assumed reinsurance A&H claim reserves in Exhibit 6.
Resolution: The NAIC is aware of this issue, but does not plan to change it for 2021 Annual reporting. If a customer fails this validation because they have assumed A&H claim reserves they should enter an explanation in the validation report
Suggested Explanation: “Invalid NAIC crosscheck – the Company has assumed A&H claim reserves on Exhibit 6.”
Issue #2
There is an invalid NAIC crosscheck (LXAHN000002) on the Accident and Health Policy Experience Exhibit for Life and Fraternal April Supplements and you may see this show up in your validation reports.
Summary
The Accident and Health Policy Experience Exhibit April supplement was updated for all lines of business in 2021 and there is an invalid NAIC Crosscheck (LXAHN000002) on the Exhibit for the Life and Fraternal filers. The NAIC is aware of the issue with this validation and is not making updates for the 2021 Annual, so you may see this crosscheck show up in your validation reports.
Crosscheck per Annual Statement Instructions
Why is this an issue? The AHPEE Column 2 is Direct Premium Earned amounts only. The amounts in Exhibit 6 for A&H unearned premium reserves and reserve for rate credits are Direct + Assumed business. In addition, the crosscheck is only adding in the current year asset for direct deferred, accrued and uncollected premium and subtracting out the current year liability for advance premiums. The prior year amounts are not included in the validation, resulting in an incomplete offset to the premium collected amounts.
Who does this impact? Any Life customer who has assumed reinsurance A&H unearned premium reserves or reserves for rate credit in Exhibit 6 and/or any Life customer who has a prior year asset balance for direct deferred, accrued and uncollected premium or a prior year liability for advance premiums.
Resolution: The NAIC is aware of this issue, but does not plan to change it for 2021 Annual reporting. If a customer fails this validation because they have assumed A&H unearned premium reserves or assumed reserves for rate credits, they should enter an explanation in the validation report. In addition, an explanation can be entered when a Life filer has an incomplete change in the asset for direct deferred, accrued and uncollected premiums or the liability for advance premiums.
Suggested Explanation: “Invalid NAIC crosscheck – the Company has assumed A&H unearned premium reserves on Exhibit 6” OR “Invalid NAIC crosscheck – the difference represents the change in deferred, accrued and uncollected premiums and/or the change in advance premiums.”
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