Accounting Standard Updates
12 Days of SSAP: Bond Project INT 24-10 Implementation Q&A
Hot Take:
JLK Rosenberger is carrying on our holiday tradition of taking a new perspective on a holiday classic – the Twelve Days of Christmas. Rather than filling your head with turtle doves and gold rings, we are focusing on the latest changes to SSAP and how they will impact your insurance entity in 2024 and beyond.
Following the final 2024 issuance of the revised statutory bond definition by the Statutory Accounting Principles Working Group (SAPWG), a variety of questions have arisen from industry participants. SAPWG has issued INT 24-01 to assist in administering those inquiries, which are described herein. The NAIC has also developed a well-received revised bond definition training program that we recommend to all our clients and friends.
Full Article
As we reflect, the NAIC adoptions related to the bond definition project mark some of the most significant transformations insurers will confront by 2025. Issue Paper No. 169 represents the culmination of several years of discussions and negotiations within the SAPWG group and interested parties. The issue paper modernizes previous accounting language that had not kept pace with financial instrument designs and methodologies over the years since the original SSAP accounting was developed.
In summary, this new SSAP Concept relates to the principles-based bond project and formalizes the discussions and decisions made through SAPWG parties. The updated SSAPs clearly define the distinctions between Issuer Credit Obligations (ICO), asset-backed securities, and SSAP 21 assets.
To assist industry with implementing the new guidance, regulators adopted INT 24-01: Principles-Based Bond Definition Implementation Questions & Answers, which addresses topics in applying the principles-based bond definition. This 12-page Q&A provides a written supplement to the revised SSAP No. 26.
In addition, the NAIC has developed and debuted an online, principle-based bond definition and applications training project to assist the insurance public in understanding the changes. It is free for those who sign up before 12/31/2024 and takes approximately 6 hours of reading/study with a final examination. The registration link to the course can be found here:
Register for EDU 350-118: Principles-Based Bond Project Training
Deep Dive: Learn more about what’s brewing at SAPWG and our hot takes on items being discussed.
