The Statutory Accounting Principles Working Group (“SAPWG”) held a conference call on February 25, 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 #2022-14: Issue Paper No. 170 – Tax Credits Project – This item provides a historical record of the sequence of events and discussions which occurred throughout the Tax Credits Project. The changes to SSAP No. 93 – Investments in Tax Credit Structures and SSAP No. 94 – State and Federal Tax Credits were effective January 1, 2025.
- Ref #2024-10: SSAP No. 56 – Book Value Separate Accounts – The adopted revisions to SSAP No. 56 – Separate Accounts clarify measurement method guidance for when assets are reported at a measurement method other than fair value and prescribe guidance for how transfers to/from the general account and separate account should be recognized. The changes will be effective January 1, 2026. (Life/Fraternal only)
- Ref #2024-16: Repack and Derivative Investments – This item did not result in any SSAP revisions, but modifies the Annual Statement Instructions to clarify that held debt securities which are sold to a Special Purpose Vehicle (SPV) and then reacquired, reflecting the addition of derivative or other components, should be reported as a disposal and reacquisition in the investment schedules.
- Ref #2024-22: ASU 2024-01, Scope Application of Profits Interest and Similar Awards – This item modifies SSAP No. 104 – Share Based Payments to adopt with modifications ASU 2024-01 Compensation – Stock Compensation (Topic 718). The modifications are reflected in paragraphs 4 and 5 of the SSAP.
- Ref #2024-23: Derivative Premium Clarifications – This item modifies SSAP No. 86 – Derivatives to add clarifying language surrounding derivative financing premiums and recommends modifications to the Annual Statement instructions to ensure consistent terminology for derivative financing premium within Note 8.A(8) and Schedule DB, Part A and B. The previously exposed revisions, which clarified the calculation of realized losses in relation to derivative premium costs, were moved to agenda item #2024-15: ALM Derivatives for further consideration as part of the larger derivatives and IMR discussion.
- Ref #2024-25: SSAP No. 16 Clarifications – This item modifies SSAP No. 16 – Electronic Data Processing Equipment and Software to include proper references to the specific U.S. GAAP Accounting Standards Codification (ASC) when not specifically referenced in the SSAP.
- Ref #2024-27: Issue Papers in Statutory Hierarchy – This item modifies the Statutory Accounting Preamble to include Issue Papers in Level 5 of the Statutory Hierarchy with a special note that issue papers should only be used and applied as authoritative guidance if they do not conflict with other sources of statutory guidance. In addition, the introduction in Appendix E – Issue Papers will be modified to include similar language.
Ref #2024-28:Holders of Capital Notes – This item modifies SSAP No. 41 – Surplus Notes to clarify certain aspects for capital notes such as incorporating a definition within INT 24-01: Principles-Based Bond Definition Implementation Questions and Answers, clarifying the admittance restrictions, clarifying guidance for NAIC designations and updating impairment guidance. Most of the revisions begin in Paragraph 9 of the SSAP.
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