The NAIC recently held its Fall National Meeting in San Francisco from November 15-18. In typical NAIC fashion, a lot of ground was covered and this series of communications will bring our readers up to speed on what we learned while in attendance. For the benefit of our Notes customers, this post will give an overview of what impacts were made to the Notes, while subsequent posts will follow with the synopsis of other modifications that will impact our full statement customers.
There were three items adopted by the Statutory Accounting Principles (E) Working Group (“SAPWG”) that require revisions to year-end 2018 reporting and the related NAIC notes instructions, which will be finalized and communicated during December. For our Notes customers, these changes will be updated automatically within our application to alleviate a step in your year-end process.
- 2018-08: Private Placement Variable Annuities – Revisions to SSAP No. 21 – Other Admitted Assets, paragraph 6 were adopted to clarify that the guidance which allows insurance reporting entities that are the owner and the beneficiary of the life insurance contract to report the amount realizable (generally cash surrender value) as an admitted other than invested asset is limited to insurance contracts that qualify under Internal Revenue Control §7702.
- 2018-15: Additional Elements Under the Tax Cuts and Jobs Act – In a previous post, we provided an overview of the impacts of INT 18-03: Additional Elements Under the Tax Cuts and Jobs Act, which provides accounting and reporting guidance in relation to Repatriation Transition Tax (“RTT”), the Global Intangible Low-Taxed Income (“GILTI”), and the Alternative Minimum Tax (“AMT”) Credit. This agenda item requires disclosure of the RTT, the RTT schedule of payments, identification of whether AMT was recognized as a current year recoverable or deferred tax asset (“DTA”), and information regarding the AMT credit carryforward. A blanks proposal has been exposed for adoption in 2019, as noted below, but this is a required disclosure for year-end 2018.
- 2018-27: SSAP No. 48 Entities’ Loss Tracking – As discussed further in 2018-30BWG below (effective 2019), this disclosure specifies that SSAP No. 48 – Joint Ventures, Partnerships and Limited Liability Companies entity shall be included in the loss-tracking disclosure for year-end 2018.
Three items that will impact the Notes were exposed for comments by the Blanks Working Group (“BWG”) during the Fall National Meeting. If adopted, each of these Updates would be effective beginning with the 2019 Annual Statement.
- 2018-27BWG – SSAP No. 1 (paragraph 23b) requires the disclosure of any assets pledged to others as collateral or otherwise restricted in a reporting entity’s general and separate accounts. The current NAIC prescribed table format does not allow for the bifurcation of collateral assets between the General Accounts and the Separate Accounts (life companies) or Protected Cells (property companies). If the exposure is adopted, the illustrations will be modified to include the additional lines to capture this information.
- 2018-28BWG – At this meeting, the BWG exposed updates to add instructions to Note 9 (Income Taxes) for the following new disclosures (as discussed above):
- Note 9H – Repatriation Transition Tax (“RTT”)
- Note 9I – Alternative Minimum Tax (“AMT”) Credit
- An illustration has been added for Note 9I, which will be data captured when this exposure is adopted. For the benefit of our Notes customers, Gain has already updated the table in our application with the suggested table, which can be used for the 2018 Annual Statement filing as well as 2019 quarterly filings, prior to the required adoption date of this blanks update (2019 Annual Statement).
- 2018-30BWG – As noted above, this update simply modifies the instructions and illustrations within Note 10.O – SCA Loss Tracking to include references to SSAP 48 entities throughout (SSAP No. 48 – Joint Ventures, Partnerships and Limited Liability Companies).
Lastly, we’ve published an exhaustive list of all 2018 updates to the Notes, please check it out.
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.
Detailed information on adopted and exposed modifications can be found at the following locations:
- Statutory Accounting Principles Working Group (SAPWG) Exposures
- Statutory Accounting Principles Working Group (SAPWG) Modifications (these are available via AP&P Manual Updates from the NAIC.
- 2018 Summer Meeting – 8/4/2018
- Blanks Working Group (BWG) Exposures
- Blanks Working Group (BWG) Modifications