The Statutory Accounting Principles Working Group (“SAPWG”) held a conference call on January 10, 2024. 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. These items were adopted with minor revisions recommended by interested parties or regulators during the exposure period and discussed during the meeting and apply to all lines of business (Life/Fraternal, Property, Health and Title). All revisions are effective immediately, unless otherwise noted.
- Ref #2023-24: ASU 2016-13, Measurement of Credit Losses on Financial Instruments (CECL) – This item rejects ASU 2016-13 within INT 06-07: Definition of Phrase “Other Than Temporary” and fifteen applicable SSAPs. Statutory framework has already recognized and incorporated future credit loss potential, while GAAP is just beginning to recognize an expectation of future credit losses with the application of CECL.
- Ref #INT 23-04T: Scottish Re Life Reinsurance Liquidation Questions – This adoption provides guidance for ceding entities that have reinsurance with a U.S. life reinsurer in liquidation (Scottish Re), focusing on the accounting and reporting of reinsurance recoverables. INT 23-04T addresses the following key areas:
- Commutation or Recapture of a Life Reinsurance Contract
- Impairment of Reinsurance Recoverables
- Reporting of Reinsurance Recoverables
- Admissibility of Reinsurance Recoverables
- Disclosures
The detailed guidance in this INT incorporates the primary guidance in SSAP No. 61R – Life, Deposit-Type and Accident and Health Reinsurance and SSAP No. 5R – Liabilities, Contingencies and Impairments of Asset and is applicable only to the accounting and reporting of reinsurance recoverables with Scottish Re.
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