The Statutory Accounting Principles Working Group (“SAPWG”) held a conference call on May 22, 2025. This post is intended to provide an informative snapshot of what was accomplished during the meeting, as well as help accelerate your determination of the impact the adoptions and modifications will have on your financial statements.
Adopted Items
The SAPWG reviewed and adopted the following items that were previously exposed for comment. The items were adopted with minor revisions recommended by interested parties or regulators during the exposure period and discussed during the meeting. The adopted items apply to all lines of business (Life/Fraternal, Property, Health and Title) and all revisions are effective immediately, unless otherwise noted.
- Ref #2023-24: Current Expected Credit Losses (CECL) – This item adopts Issue Paper No. 171 – Current Expected Losses (CECL), clarifying the issue paper is for historical reference only and should not be construed to provide statutory guidance. In addition, the issue paper will not be included in the 2026 AP&P manual and will only be available electronically on the NAIC website.
- Ref #2025-04: Capital Structure Code – This item deletes the capital structure code reporting column (Column 37) from Schedule D-1-1: Long-Term Bonds – Issuer Credit Obligations (D-1-1) and Schedule D-1-2: Asset-Backed Securities (D-1-2) for year-end 2025. There is a comment letter and corresponding BWG proposal, 2025-11BWG, to be discussed for adoption in the May 29, 2025 BWG meeting.
- Ref #2025-06: AVR Line: Unrated Multi-Class Securities – This item deletes Line 8 – Total Unrated Multi-Class Securities Acquired by Conversion from the Asset Valuation Reserve – Default Component. This item should be removed for year-end 2025 reporting as there are no items that qualify for reporting on this line. If a company was planning to report amounts in this AVR line for 2025, it would be considered incorrect reporting. The line will be renamed to “intentionally left blank” for 2025 reporting to prevent renumbering in the AVR Schedule. This item corresponds with 2025-12BWG, to be discussed for adoption in the May 29, 2025 BWG meeting. (Life/Fraternal)
- Ref #2025-07: Dividend General Interrogatory Update – This item will not result in changes to the AP&P Manual, but provides a recommendation to the BWG to adopt agenda item 2025-08BWG. The BWG item removes the General Interrogatories, Part 2, #14 disclosure (Total dividends paid stockholders since organization of the reporting entity) and renumbers the remaining lines. This disclosure is being removed as it is not consistently included across the blanks and is not required under SSAP No. 72 – Surplus Notes and Quasi-Reorganizations. (Life/Fraternal)
- Ref #2024-07: Reporting of Funds Withheld and Modco Assets – This item will not result in changes to the AP&P Manual, but provides a recommendation to the BWG to adopt agenda item 2025-05BWG in the May 29, 2025 meeting. The BWG proposal adds a new part to Schedule S (Part 8) to capture data on all modified coinsurance (MODCO) and other reinsurance transactions with funds withheld, by NAIC designation category, as of December 31, current year. If adopted, the new schedule will be included in the 2025 Annual Statement. (Life/Fraternal)
- Ref #2025-05: Reinsurer Affiliated Assets – This item modifies SSAP No. 1 – Accounting Policies, Risks & Uncertainties, and Other Disclosures to expand the restricted asset note disclosure (Note 5.L) to capture information, by investment schedule, of funds withheld assets that are related to/affiliated with the reinsurer. It also adds language in paragraph 23 of the SSAP that the restricted asset disclosure will be a required note in all quarterly and annual financial statements, effective with the 2025 Annual Statement and Q1 2026 Quarterly Statement. There is a corresponding BWG exposure (2025-10BWG) that will be discussed for adoption in the May 29, 2025 BWG meeting.
- Ref #2025-08: Medicare Part D Prescription Drug Payment Plan Disclosures – This item modifies SSAP No. 84 – Health Care and Government Insured Plan Receivables to add disclosures for Medicare Part D Prescription Payment Plan receivables to Note 28 – Health Care Receivables starting with the 2025 Annual reporting period. This item has a corresponding BWG exposure (2025-04BWG) that will be discussed for adoption in the May 29th, 2025 BWG meeting. NAIC staff recommends the BWG adopt 2025-04BWG after modifying the proposal to remove the prior year column from the Annual Statement instructions and illustrations for Note 28.C(1).
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