Accounting Standard Updates

Hot off the NAIC press: 2019 SAP to Annual Statement Disclosure Checklists

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Hot Take:

Hot Take

Within the last week, the NAIC Statutory Accounting Principles (e) Working Group has published the latest materials for SAP filers to cross-reference their annual statement filing 2019 note disclosures with the associated statutory promulgations.

Full Article

For the sake of time, we are updating our clients and friends with links to the 2019 NAIC disclosure checklists for the Property Casualty, Life, Accident & Health/Fraternal, Health, and Title annual statement blanks. Everyone at this stage is working feverishly to meet filing and printer deadlines.  In appreciation of that hard effort, we wanted to get this to you as soon as possible. The direct NAIC links are provided herein.

First, some general highlights and directions. The checklists are set up in an Excel format. Changes or reporting timing are handled through color-coding in the Excel workbooks:

  • Yellow highlighted items pertain to 2019 adjustments or additions.
  • Olive green highlights signify items effective January 1, 2020.
  • Dark blue highlights show changes effective December 31, 2020.

The 2019 disclosure checklists primarily reflect yellow highlighted items.

Some 2019 Highlights for Property Casualty and Life, Accident, and Health/Fraternal

Germain to both industries:

  • Cash, Cash Equivalents, Drafts and Short-term Investments – SSAP No. 2R, paragraph 7 – addresses money market mutual funds meeting certain requirements under the Investment Company Act of 1940 for handling and reporting as cash equivalents and how to handle valuation;
  • Leases – SSAP No. 22R, various paragraphs – revises the SSAP cross-referencing paragraphs due to the extensive changes made in this SSAP to better conform to GAAP language; appears annual statement note references are unchanged;
  • Bonds (Revised) – SSAP 26R, paragraph 30L – eliminates AS Note 5O relating to separate identification of structured notes;
  • Unaffiliated Common Stock (Revised) – SSAP 30R, various paragraphs – will require a further description of restricted common stock outside FHLB agreements and the purpose of the restriction. Revises the SSAP cross-referencing paragraphs only;
  • Derivatives – SSAP 86, various paragraphs – primarily revises cross-referencing paragraph numbering in the SSAP (mainly paragraph 60 sub-numbering) with revised paragraph numbering in the annual statement;
  • Postretirement Benefits Other Than Pensions – SSAP 92, various paragraphs – revises numbering on certain annual statement line items; strikes paragraph 66 of the SSAP requiring the one percentage point impact disclosure and the associated annual statement disclosure; strikes paragraph 66r and 66s of the SSAP and the related annual statement paragraph 12A(6) and 12A(19) – as nonessential disclosures;
  • Fair Value (Revised) – SSAP 100R, various paragraphs – revises descriptive language in the SSAP, particularly for paragraph 48 relating to reporting and measuring the various classes of assets and liabilities; revises the requirements for reporting transfers between Level 1 and Level 2 assets and liabilities; revises the paragraph numbering in the SSAP;
  • Pensions – SSAP 102, various paragraphs – updates numbering on several annual statement note references to this SSAP and incorporates clarified language within the SSAP promulgation that flow into the note cross-reference;
  • Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (Revised) – SSAP 103R, paragraph 28l, annual statement note 17C – revises the reporting of wash sales for certain NAIC designated securities to only being applicable for sales and purchases that cross quarter-end and year-end reporting periods. This was done to simplify prior detail reporting of wash sale activity that had little impact on reporting and decision making. It also includes language clarification of paragraph 49 of SSAP 103R with respect to transfers of assets that may have previously met the circumstances to be considered a qualified special-purpose entity (QSPE).  The disclosure checklists refer the filer to SSAP 25 for further handling.

Property & Casualty Only

  • Discontinued Operations and Unusual and Infrequent Items – SSAP No. 24 paragraph 11a. – 11c. – additional note disclosure for Note 4A2, 4A3, 4A4 regarding the disposal of certain assets.

Life, Accident & Health/Fraternal Only

  • Separate Accounts – SSAP 56, paragraph 31-35a – appears AS note references are renumbered to coincide with SSAP paragraph references.
  • A note for this group for December 31, 2020, reporting – SSAP 61R, Life, Deposit-Type and Accident and Health Reinsurance-Revised paragraph 78-84 and paragraph 92 will require disclosures similar to those already being reported in the comparable P&C SSAP 62R as it pertains to reinsurance contract exposure to risk-limiting features. The location of those disclosures is to be determined.

Download links for NAIC Annual Statement Disclosure Checklists:

Click below to download the checklists directly from the NAIC.