While the NAIC Instructions for the Notes state that reporting None or Not Applicable is acceptable for Note 24, when applicable, the NAIC has notified us that they are starting to write letters to filers who do not explicitly show a response to question 24.E(1) for Life, Health, and Fraternal companies or 24.F(1) for Property companies (certain regulators want to see this as an explicit response to this disclosure).
With this information, Gain Compliance is now making 24.E/F(1) a required Note for disclosure and we highly recommend that you review Note 24 to confirm compliance with these new “drawer rules”.
- Note 24.E/F is required to be reported every period, including Quarterly Filings, so this applies to your 2020 Q1 Statement.
- Per NAIC analysts, certain regulators now want an explicit Yes/No response on 24.E/F(1).
- If the response to 24.E/F(1) is “No”, the remaining questions can be answered with ‘None’ or ‘Not Applicable’.
- If the response to 24.E/F(1) is “Yes”, the reporting entity MUST present the tables in 24.E/F(2)-24.E/F(5), even if all amounts in the table are zero.
- If Note 24.E/F(1) is already explicitly disclosed in your Notes, you are likely in good shape, with no need to make any changes. You will want to confirm that if you have a “Yes” response to 24.E/F(1), that you also disclose the tables in 24.E/F(2) – 24.E/F(5).
- If you have Note 24, 24.E/F, or 24.E/F(1) set to None or Not Applicable, we highly recommend that you update your Notes to explicitly disclose the table in 24.E/F(1).
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.