The NAIC is in the process of revising SSAP 22-Leases. Lease accounting has been substantially revised following the issuance of ASU 2016-02 – Leases (Topic 842), effective 2019 for public entities (2020 for non-public entities). The most significant changes under the new GAAP lease guidance is the requirement to treat operating leases as financing leases.
The NAIC interpretations of ASU–2016-02 rejected the new GAAP treatment. Therefore, for statutory accounting purposes, all leases continue to be recorded as operating leases with lease expense recognized on a straight-line basis over the lease term.