The working group made minor nonsubstantive revisions to SSAP No. 26R Bonds during the NAIC Spring Meeting.
The first change extended the current disclosures with respect to called bonds to include bonds terminated through a tender offer. This revision was in response to the working group’s previous adoption of 2020-02, which clarified that the accounting and reporting of bond investment income and capital gains and losses, due to early liquidation either through a call or a tender offer, shall be similarly applied.
The second revision clarified that perpetual bonds are within the scope of SSAP No. 26R, and those with an effective call option are to be amortized under the yield-to-worst concept. Perpetual bonds without call features are to be reported at fair value, regardless of NAIC designation. This revision represents a compromise with the industry as the original exposure required all perpetual bonds to be reported at fair value.
Effective date: Immediately