Accounting Standard Updates
12 DAYS OF SSAP: INT 21-01 Cryptocurrencies
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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 2022 and beyond.
Today’s spotlight is on INT 21-01 Cryptocurrencies, clarifying that cryptocurrencies do not meet the definition of cash when directly held and should be classified as nonadmitted assets. However, investments in indirect funds may hold cryptocurrencies. Additional discussion took place at the December 2021 NAIC meeting that some insurance companies held cryptocurrencies but were often hard to identify in the statutory financial statements. The working group proposed adding a new general interrogatory.
Full Article
INT 21-01 Cryptocurrencies clarify that cryptocurrencies do not meet the definition of cash when directly held and should be classified as non-admitted assets in accordance with SSAP No. 4 – Assets and Nonadmitted Assets. This clarification, however, does not impact the direction for investments in funds that may hold cryptocurrencies via SSAP No. 30R – Unaffiliated Common Stocks, SSAP No. 48 – Joint Ventures, Partnerships and Limited Liability Companies or SSAP No. 97 – Investments in Subsidiary, Controlled and Affiliated Entities.
The discussion about reporting and disclosing cryptocurrencies continued at the SAPWG December 2021 meeting. NAIC staff indicated that while researching this topic, it was noted that some insurance companies held cryptocurrencies but at times they were hard to identify in the statutory financial statements.
As a result, the working group proposed to add a new general interrogatory which would require the answers to the following questions:
- Does the reporting entity hold any cryptocurrencies, and if so, what schedules are they reported in?
- Are cryptocurrencies accepted for the payment of premiums?
The working group forwarded the proposal to Blanks Working Group to add the new interrogatory to the annual blanks to require the disclosure.
Interprets the following SSAP:
SSAP No. 2R—Cash, Cash Equivalents, Drafts and Short-Term Investments
Effective date:
Immediately
Deeper dive on this topic:
