The Statutory Accounting Principles Working Group (“SAPWG”) met virtually and in person at the NAIC Spring National Meeting on April 4, 2022. This post is intended to provide an informative snapshot of what was accomplished during the meeting and to help accelerate your determination of the impact the adoptions and modifications will have on your financial statements.
The SAPWG reviewed and adopted the following eight items that were previously exposed for comment. The SAP Clarifications (new terminology for nonsubstantive revisions) are effective immediately and apply to all lines of business (Life/Fraternal, Property and Health), unless otherwise noted.
- Ref #2021-22: SSAP No. 97 – Supplemental Reporting – This item did not result in statutory modifications to SSAP No. 97 – Investments in Subsidiary, Controlled and Affiliated Entities, however, with this adoption a proposal (2022-02BWG) will be forwarded to the Blanks Working Group (BWG) to add supplemental data capture elements (in electronic-only columns) to Schedule D, Part 6 – Section 1. The proposed expansion would include items such as prior year’s BACV, nonadmitted amount, sub-2 verified value and VISION filing number.
- Ref #2021-23: SSAP No. 43R – Financial Modeling – Updated Guidance – This item adopts clarifying language to the SSAP No. 43R – Loan-backed and Structured Securities summarized financial modeling guidance and refers users to the Purposes and Procedures Manual of the NAIC Investment Analysis Office for additional detailed financial modeling guidance.
- Ref #2021-24: Cryptocurrency General Interrogatory – This item did not result in statutory modifications to the SSAPs, however, the adoption represents the SAPWG’s support for a corresponding BWG proposal (2022-01BWG) to add a new general interrogatory to the annual reporting blanks regarding the use or acceptance of cryptocurrencies.
- Ref #2021-26EP: Editorial Updates (Substantive vs. Nonsubstantive) – This item provides clarifying editorial revisions to the Preamble, Volume I and II’s Table of Contents and Appendix F of the Accounting Practices & Procedures Manual regarding the terminology references of “substantive” and “nonsubstantive”, which have historically been used to describe statutory revisions being considered by the SAPWG to the AP&P Manual. This item completes the implementation of the SAPWG’s two part initiative to provide clarifying adoption language as detailed in agenda item #2021-14: SAP Terminology.
- Ref #2021-27: ASU 2021-04, Issuer’s Accounting for Certain Modifications – This item adopts clarifying language to SSAP No. 72 – Surplus and Quasi-Reorganizations to reject ASU 2021-04 for statutory accounting while incorporating guidance that modifications of terms, conditions or exchanges of free-standing equity-classified written call options shall be treated as an exchange.
- Ref #2021-28: ASU 2021-03, Intangibles – Goodwill – This item revises SSAP No. 68 – Business Combinations and Goodwill to reject ASU 2021-03, Intangibles – Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events for statutory accounting.
- Ref #2021-29: ASU 2021-05, Variable Lease Payments – This item revises SSAP No. 22 – Leases to reject ASU 2021-05, Leases (Topic 842), Lessors – Certain Leases with Variable Lease Payments for statutory accounting.
- Ref #2021-30: ASU 2021-06, Amendments to SEC Paragraphs – This item revises Appendix D – Nonapplicable GAAP Pronouncements of the AP&P Manual to reject ASU 2021-06.
As always, Gain Compliance integrates the latest changes into the NAIC guidelines to streamline the reporting process. If there are any further questions or comments, please do not hesitate to reach out.
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