Authored by Jeff Maffitt
Our insurance experts attended the National Association of Insurance Commissioners (NAIC) Fall 2019 National Meeting on Dec. 7–10, 2019, in Austin, Texas, to monitor regulatory updates. This report summarizes key activities that occurred in a conference call that followed, held by the Statutory Accounting Principles (E) Working Group (SAPWG) on Jan. 8, 2020.
The SAPWG met to discuss two topics, including editorial updates and collateralized fund obligations.
Insurance organizations should take note of these changes, as they may significantly affect their accounting in 2020 and beyond.
Ref #2019-44EP: NAIC Accounting Practices and Procedures Manual Editorial and Maintenance Update
Adopted revisions to SSAP No. 62R – Property and Casualty Reinsurance and various other SSAPS to improve readability and update cross references. Revisions are effective Jan. 8, 2020.
Ref #2019-21: SSAP 43R – Equity Instruments
During the 2019 Summer National Meeting, SAPWG exposed revisions to SSAP No. 43R – Loan-backed and Structured Securities which would exclude collateralized fund obligations (CFOs), and similar structures that reflect underlying equity interests, from the scope of SSAP No. 43R, as well as prevent existing equity assets from being repackaged as securitizations and reported as long-term bonds. In its Jan. 8 conference call, SAPWG directed NAIC staff to begin drafting an issue paper to address concerns from industry and provide clarification on proposed revisions to SSAP No. 43R. The issue paper will discuss four issues:
This agenda item is expected to be discussed further at the 2020 Spring National Meeting.
For more information on these topics, or to learn how Baker Tilly’s insurance industry specialists can help, contact our team.