SSAP and Blank Updates to the Statutory Financial Statements – May 24, 2022 SAPWG Conference Call

The Statutory Accounting Principles Working Group (“SAPWG”) held a conference call on May 24, 2022. 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 three items that were previously exposed for comment. The first two were adopted without any discussion or commentary from the SAPWG, NAIC staff, or interested parties and the majority of the call was focused on Ref #2021-21, as discussed below. All revisions are effective immediately and apply to all lines of business (Life/Fraternal, Property and Health), unless otherwise noted.

  • Ref #2022-03: Premium Adjustments Allocated to Jurisdictions – There were no statutory revisions as a result of this adoption. This item was adopted to express support for the corresponding Blanks Working Group (BWG) exposure 2022-10BWG, which modifies the instructions for Schedule T, the State Page, and Accident and Health Policy Experience Exhibit (AHPEE) clarifying the guidance for premium adjustments. 
  • Ref #2022-08: INT 22-01T: Freddie Mac When-Issued K-Deal (WI Trust) Certificates – This tentative interpretation was adopted to clarify that the investments in the Freddie Mac “When Issued K-Deal” (WI) Program are within the scope of SSAP No. 43R – Loan-Backed and Structured Securities from the date of initial acquisition and not as a forward contract under SSAP No. 86 – Derivatives.
  • Ref #2021-21: Related Party Reporting – This item modifies SSAP No. 25 – Affiliates and Other Related Parties and SSAP No. 43R to clarify affiliate and related party guidance as well as new reporting disclosures for investments acquired from a related party, regardless of whether the investment is captured on an “affiliate” reporting line. This adoption incorporated revisions proposed by interested parties. No revisions were made to the current definition of an affiliate or reporting on the affiliate reporting line. Direction was provided by SAPWG to NAIC staff to consider footnote revisions as proposed by interested parties alongside the appropriate revisions to SSAP Nos. 25 and 97 in a separate agenda item.

The key aspects of the adoption are as follows:

  • The related party electronic code column will be effective December 31, 2022.
  • The related party new electronic code column is effective for all noted investment schedules: B – Mortgage Loans, D – Bonds, DB – Derivatives, BA – Other Invested Assets,  DA – Short-Term Investments, E2 – Cash Equivalents, and DL – Securities Lending.
  • The related party new electronic code column shall be completed for all investments on any reporting line.
  • SAPWG supports the inclusion of Code 6 (no related party relationship) as exposed by the BWG (2021-22BWG) to eliminate potential confusion on whether a blank represents incomplete reporting or a non-related party relationship.

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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