Summary
The State Page for Life/Fraternal filers, and Health filers that complete the Life Supplement: State Page, has been significantly modified by the NAIC through the adoption of the Blanks Working Group (BWG) item 2022-19BWG Modified. The purpose of this modification is to make the lines of business reported on the Life Insurance (State Page) consistent with the lines of business being reported on the Analysis of Operations by Lines of Business pages.
What does this mean?
In short, the exhibit will need to be reported on a more detailed level than what has been required in the past.
- There is special reporting allowed in 2023 for certain lines and/or columns
- In 2024, the entire exhibit will need to be reported at the detailed lines of business (LOB) as shown in the NAIC blanks and instructions
- Gain Compliance is making available an updated version of our Excel State Page workpaper for our customers, incorporating all of the BWG modifications.
For additional information on the 2023 Special Reporting, a detailed explanation of the changes to the State Page, and our initial thoughts on how Gain can help support a successful transition, please click on the link to the BWG item above and/or continue reading.
2023 Special Reporting
The NAIC recognizes the additional detail required in the modified state page schedule could be a difficult transition for insurance companies. As such, they have allowed for some special reporting options in 2023 only. NOTE: While this 2023 exception reporting is acceptable, Gain Compliance strongly suggests reporting the information at the detailed LOB level (if you are able) to avoid potential validation messages in 2024 due to the change in how data was reported.
- The reporting entity can choose to break out Columns 14 through 21 (Claims settled during current year) and Columns 23 through 28 (policy exhibit) by LOB for each group OR report in the “Other” line for each group if unable to break out into the detailed LOBs.
- All rows are required to be reported for Columns 13 (Benefits Incurred During Current Year) and 22 (Benefits Unpaid December 31, Current Year). Columns 22 and 28 will require manual entry as formulas will not be added to this column until 2024 reporting.
- Rows 11, 19, 26, 33 and 46 are total lines for the different LOBs and should NOT be overridden to input the data. The contributing information to these subtotal lines should be entered by LOB or in the “Other” line and calculated to the subtotal.
- The Group Credit Life Insurance Loan information in footnote (a) will be required (if applicable) even if the company chooses to report in the “Other” line for 2023.
- Footnote (f) should be completed by any Life company that chooses to include their Separate Account product information in the “Other” line for each group in the main schedule. In Annual 2024, footnote (f) will be removed and the Separate Account products will need to be reported in their respective LOBs.
Details of the changes
The revised State Page will require a more granular breakout by line of business for each jurisdiction in which the company has written direct business, direct losses paid, or direct losses incurred (see images below). The line of business descriptions will show as rows down the left side of the exhibit and will be reported at the same level of detail as the Analysis of Operations by Lines of Business. The Line of Business detail is broken into groups as follows:
- Individual Life
- Industrial
- Whole
- Term
- Indexed
- Universal
- Universal with Secondary Guarantees
- Variable
- Variable Universal
- Credit
- Other
- Group Life
- Whole
- Term
- Universal
- Variable
- Variable Universal
- Credit
- Other
- Individual Annuities
- Fixed
- Indexed
- Variable with Guarantees
- Variable without Guarantees
- Life Contingent Payout
- Other
- Group Annuities
- Fixed
- Indexed
- Variable with Guarantees
- Variable without Guarantees
- Life Contingent Payout
- Other
- Accident and Health
- Comprehensive Individual
- Comprehensive Group
- Medicare Supplement
- Vision Only
- Dental Only
- Federal Employees Health Benefits Plan
- Title XVIII Medicare
- Title XIX Medicaid
- Credit A&H
- Disability income
- Long-Term Care
- Other health
The exhibit will be landscape in orientation and consist of 28 columns of information spanning two pages. The columns are organized similar to the individual parts of the former (2022 and prior) schedule:
- Column 1 – Premiums and Annuities Considerations
- Column 2 – Other Considerations
- Columns 3 through 7 – Dividends to Policyholders/Refunds to Members
- Columns 8 through 12 – Claims and Benefits Paid
- Column 13 through 22 – Direct Death Benefits and Matured Endowments Incurred (with claim settlement activity for the year)
- Columns 23 through 28 – Policy Exhibit (number and amounts in force)
The exhibit will collect current year information only and will no longer roll forward direct benefits incurred and policy exhibit amounts from prior year on the face of the schedule.
The second page of the exhibit will include several new or revised footnotes that will require input by the preparer:
- MODIFIED Footnote(a) Includes Group Credit Life Insurance Loans less than or equal to 60 months at issue – $__ prior year and $__ current year; Loans greater than 60 months at issue BUT NOT GREATER THAN 120 MONTHS – $__ prior year and $__ current year information required
- NEW! Footnote(b) Corporate Owned Life Insurance/BOLI 1) Number of policies 2) covering number lives 3) face amount
- NEW! Footnote(c) Deposit-Type Contract Considerations NOT included in Total Premiums and Annuities Considerations: $ Individual, $ Group, $ Total. Total consideration should cross-check to Schedule T, Column 7, by state.
- NO CHANGE Footnote(d) For health business on indicated lines report: Number of persons insured under PPO managed care products and number of person insured under indemnity only products
- NEW! Footnote(e) For health premiums written: amount of Medicare Title XVIII exempt from state taxes or fees
- NEW! Footnote(f) Certain Separate Account products are included in “Other” product categories in the table(s) above:
- 1. Individual Life – Other includes the following amounts related to Separate Account policies: Column 1 (premiums), Column 7 (dividends), Column 12 (claims and benefits paid)
- 2. Group Life – Other includes the following amounts related to Separate Account policies: Column 1, Column 7, Column 12
- 3. Individual Annuities – Other includes the following amounts related to Separate Account policies: Column 1, Column 7, Column 12
- 4. Group Annuities – Other includes the following amounts related to Separate Account policies: Column 1, Column 7, Column 12
Images of the Blank – 2023 versus 2022
To fully appreciate the scope of the changes in the 2023 State Page, we thought it would be helpful to show the Annual Statement blank for both years. You can also see the 2023 blank and instructions by clicking on the link to the BWG item above.
Page 1 of the 2023 Blank
Page 2 of the 2023 Blank
2022 Blank
How is Gain planning to support our customers with this transition?
- We will provide an updated Excel workpaper with states in rows and states in columns for Life/Fraternal filers and Health filers that complete the Life supplement
- We will add updated badges and right-hand panel content to the application, explaining the changes for each of the pages and the footnotes.
- Friendly explanations will be added to the validation report to help provide direction on how to clear the validation and/or suggested language to use if an explanation is required.
- We will add validations (cross-checks) to the subtotal and total lines of the schedule back to other areas in the Annual Statement, where applicable.
- We will frequently communicate and share information – we can provide PDFs out of the application, links to the Annual Statement instructions, and the new workpaper once this information becomes available
As always, Gain Compliance integrates the latest changes into the NAIC guidelines to streamline the reporting process. If there are any questions or comments, please do not hesitate to reach out.
Stay on top of changes to the NAIC guidance on Gain’s library of resources.
Make sure to check out company blog posts, and follow Gain Compliance on LinkedIn, Facebook and Twitter.