Accounting Standard Updates

SAPWG 2024 YTD Activity

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As regulators prepare to kick off the NAIC Spring 2024 National Meeting this weekend, we will tune in and provide an update on “hot” topics discussed, adopted revisions, and any exposures to watch for.

In this post, you will find a summary of adoptions from the SAPWG interim meetings in 2024.

To date, SAPWG has met twice and adopted minor changes to the 2023 Accounting Practices and Procedures Manual:

INT 23-04 is an SSAP clarification that interprets commutation or recapture of a life reinsurance contract and provides additional guidance related to accounting and reporting of reinsurance recoverable from Scottish Re Life Reinsurance, a US-licensed reinsurer who was put in liquidation in 2023.

ASU 2016-13 Measurement of Credit Losses on Financial Instruments (CECL) is another SSAP clarification that rejects ASU 2016-13 and other related ASUs for statutory accounting.

The following adopted revision is effective for year-end 2024 financial reporting and will be included in the 2024 Accounting Practices and Procedures Manual:

SSAP No. 21R – Other Admitted Assets: adopted revisions incorporate a new disclosure to detail admitted and non-admitted collateral loans in accordance with the underlying collateral securing the loan. These revisions will enable regulators to quickly identify the type of collateral supporting the admittance of collateral loans since the current reporting detail on Schedule BA does not provide sufficient information on the type of collateral used to determine the admissibility of the asset.

The revisions affecting 2023 are quite narrow and did not significantly impact carriers. Revisions to SSAP No. 21R were expected as the group continues to fine-tune guidance that was adopted in 2023 related to the Principles-Based Bond Project. More revisions are exposed and are on the agenda for SAPWG to discuss later this week. Stay tuned for updates.

Additional reading:

NAIC SAPWG Materials

Take a deeper dive on the Principles-Based Bond Project

Take a deeper dive into other revisions to SSAP 21R

Take a deeper dive on items exposed for discussion during the NAIC Fall 2023 National Meeting