The Statutory Accounting Principles Working Group (“SAPWG”) met virtually and in person at the NAIC Fall National Meeting held on December 9, 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 #2024-06: Risk Transfer Analysis on Combination Reinsurance Contracts – This item adopts revisions to SSAP No. 61 – Life, Deposit-Type and Accident and Health Reinsurance and Appendix A-791, Life and Health Reinsurance Agreements to clarify risk transfer on combination reinsurance contracts with interdependent contract features. The clarifications are effective immediately for new/newly amended contracts with provisions allowing until December 31, 2026 for existing contracts. For existing contracts, the clarification should be accounted for as a change in accounting principles in accordance with SSAP No. 3 – Accounting Changes and Corrections of Errors. (Life/Fraternal, Health)
- Ref #2024-21: Investment Subsidiaries Classification – This item is effective 12/31/2026. It supports the elimination of the investment subsidiary concept from the annual statement instructions and directs a referral to the Capital Adequacy (E) Task Force to eliminate the investment subsidiary concept from the RBC instructions. There is a corresponding Blanks Working Group (BWG) exposure (2025-20BWG) to modify the Schedule D, Part 6, Section 1 reporting categories and the Asset Valuation Reserve – Equity and Other Invested Asset Component investment subsidiary lines.
- Ref #2025-12EP: Preamble – This item adopts editorial revisions to further clarify treatment of issue papers in Level 5 of the statutory hierarchy and to reference SEC rules and interpretations as sources of authoritative U.S. GAAP for SEC registrants.
- Ref #2025-13: Residential Mortgage Loans Held in Statutory Trusts – This item adopts revisions to SSAP No. 37 – Mortgage Loans to include qualifying investment trusts that hold residential mortgage loans (RMLs) and to require reporting of RMLs held in qualifying statutory trusts on Schedule B – Mortgage Loans. Revisions to SSAP No. 2 – Cash, Cash Equivalents, Drafts and Short-Term Investments and SSAP No. 40 – Real Estate Investments establish guidance for the reporting of cash and cash equivalents and foreclosed real estate within a qualifying statutory trust. This item has been categorized as a new SSAP concept and is effective 1/1/2027 with early adoption permitted.
- Ref #2025-18: ASU 2019-12, Simplifying the Accounting for Income Taxes – This item adopts, with modification, ASU 2019-12 with revisions to fully incorporate paragraphs 19 and 20 of the Accounting Principles Board (APB) Opinion No. 28, Interim Financial Reporting, paragraph 20 which was adopted by reference within SSAP No. 101 – Income Taxes.
- Ref #2025-19: Private Placement Securities – Effective 12/31/2026, a new electronic reporting column will be added to the investment schedules to identify private placement securities and the Annual Statement instructions and illustrations will be updated to incorporate an aggregate disclosure in the Notes to Financial Statements that details key investment information by type of security (public and private placement type). The following SSAPs will be modified to capture the new reporting disclosures:
- SSAP No. 2 – Cash, Cash Equivalents, Drafts and Short-Term Investments
- SSAP No. 21 – Other Admitted Assets
- SSAP No. 26 – Bonds
- SSAP No. 30 – Unaffiliated Common Stock
- SSAP No. 32 – Preferred Stock
- SSAP No. 43 – Asset-Backed Securities
- Ref #2025-20: Debt Security & Residual Interest Disclosures – Effective 12/31/2026, the adopted revisions in this item improve utilization of existing disclosures, clarify guidance and incorporate consistent locations and frequency for debt security disclosures. In addition, this adoption includes disclosures for residuals to identify whether the company is using the practical expedient (PE) or allowable earned yield (AEY) measurement method and if the company is transitioning from the PE to the AEY method. The following SSAPs will be modified to capture the new reporting disclosures:
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- SSAP No. 2 – Cash, Cash Equivalents, Drafts and Short-Term Investments
- SSAP No. 21 – Other Admitted Assets
- SSAP No. 26 – Bonds
- SSAP No. 43 – Asset-Backed Securities
- Ref #2025-21: Retirement Plan Assets Held at NAV – This item adopts revisions to SSAP No. 92 – Postretirement Benefits Other Than Pensions and SSAP No. 102 – Pensions to clarify that retirement plan assets can be held at net asset value (NAV) and should be included in the required fair value disclosure. A BWG proposal will be exposed to address the revisions to the 2026 Annual Statement disclosures.
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For additional information on the items adopted by the NAIC SAPWG throughout 2025, please click here.
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