On August 17, 2020, the NAIC Statutory Accounting Principles Working Group (SAPWG) extended the provision of INT 20-05, Investment Income Due and Accrued to be applicable for the September 30, 2020, quarterly financial statements.
For loans that have temporarily stopped payment, triggered by COVID-19, the Interpretation states to continue recognizing investment income under existing guidance in SSAP No. 34 – Investment Income Due and Accrued (SSAP No. 34). The Interpretation further allows for the admittance of uncollected investment income due and accrued in the third quarter 2020 from mortgage loans, bank loans, and investment products with underlying mortgage loans impacted by forbearance or modification provisions. The Interpretation, however, explicitly excludes mortgage loans in default, which should continue following the guidance in SSAP No. 34.
The Interpretation will automatically expire on December 30, 2020. However, SAPWG will assess and review circumstances to determine if an extension is required beyond September 30, 2020.
Other Updated Interpretation Related to COVID-19:
You can read more about the other INTs revisited and extended by the SAPWG during their August 17 meeting by clicking below.