Accounting Standard Updates

12 Days of SSAP – Non-substantive Revisions Roundup

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Hot Take:

Hot Take

As the holidays approach, JLK Rosenberger is 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 company in 2021 and beyond.

This article is a roundup of non-substantive revisions from this year’s NAIC Summer Meeting and also includes a link to our comprehensive article on our recently published article on the non-substantive revisions adopted during the Fall Meeting.

Full Article

Next up in the 12 Days of SSAP series is a roundup of other non-substantive revisions adopted during the NAIC’s 2020 Summer meeting. There is not much to report here other than these items are general reference adjustments or revisions to keep in mind when performing your statutory accounting duties in the upcoming reporting period.

SSAP No. 2R, Cash, Cash Equivalents, Drafts and Short-Term Investments

Revisions adopted as a result of the NAIC Summer 2020 meeting update the reporting line for qualifying cash pools (line number as specified in the Annual Statement Instructions). However, it might be beneficial to review the non-substantive revisions adopted during the 2019 NAIC Fall 2019 meeting: SAPWG Reference 2019-20 and 2019-42 found in the March 2020 Accounting Practices and Procedures Manual, which can be purchased from the NAIC.

Reference 2019- 20:

Revisions were adopted to restrict certain related-party or affiliated investments in the scope of SSAP No. 26R or SSAP No. 43R, or that would otherwise be reported as other invested assets from being continually classified as cash equivalents or short-term investments to prevent the “rolling” of these investments after initial acquisition (qualifying cash pools in the scope of SSAP No. 2R are excluded from the short-term rolling provisions).

The revisions also add a disclosure requirement for short-term investments (or substantially similar investments) that remain on the short-term investment schedule for more than one consecutive year.

Effective Date: May 20, 2020

Reference 2019- 42:

Revisions were adopted allow that certain cash pools which meet defined criteria to be reported as cash equivalents.

Effective Date: January 1, 2021, early adoption permitted


SSAP No. 51R, Life Contracts
SSAP No. 52, Deposit-Type Contracts
SSAP No. 54R, Individual and Group Accident and Health Contracts

Revisions clarify that voluntary decisions to change between allowable reserving methods, which require commissioner approval under the Valuation Manual, is considered a “change in valuation basis” for accounting and reporting purposes.

Effective Date: July 31, 2020


SSAP No. 86, Derivatives

NAIC staff adopted revisions that clarify that the book adjusted carrying value and fair value of the derivatives shall reflect the value without inclusion of any impact from financing components. It also requires that the premiums payable or premiums receivable be separately reported. The concepts are consistent with existing statutory accounting guidelines, but the revisions clarify the guidance and improve uniform application.

Effective Date: January 1, 2021


SSAP No. 106, Affordable Care Act Section 9010 Assessment

In response to the repeal of the ACA Section 9010 assessment by U.S. Congress for calendar year beginning January 1, 2021, the SAPWG superseded the guidance in SSAP No. 106 and nullified INT 18-02, ACA Section 9010 Assessment Moratoriums. NAIC staff will send referral to the Blanks Working Group to remove the related disclosures for 2021 reporting and recommend guidance for year-end 2020 reporting.

Effective Date: January 1, 2021


This Just In: NAIC’s 2020 Fall Meeting’s Non-substantive Revisions

We also summarized some of the non-substantive revisions adopted during NAIC Fall meeting. You can find the information here.