Article
Updates from the Statutory Accounting Principles Working Group’s December 2025 fall national meeting
Dec. 17, 2025 · Authored by Daniel E. Buttke and Josh Leinum
This report summarizes key activities of the National Association of Insurance Commissioners (NAIC) Statutory Accounting Principles (E) Working Group (SAPWG) at the fall 2025 national meeting on Dec. 9, 2025.
SAPWG discussed a variety of topics including sale-leaseback accounting, equity method investments, interest maintenance reserve (IMR) and more. Insurance organizations should take note of these changes as they may significantly affect their accounting in 2025 and beyond.
Adopted revisions to statutory guidance
Adopted revisions support removal of the investment subsidiary concept from statutory reporting, as both regulators and NAIC staff noted that the current reporting of “investment subsidiaries” lacks transparency and allows companies to self-calculate the risk-based capital (RBC) treatment simply by placing the investment in an investment subsidiary rather than directly holding the investment. This adoption action is effective Dec. 31, 2026, and includes sponsoring a blanks proposal to remove annual statement reporting components as well as a referral to the Capital Adequacy (E) Task Force to eliminate RBC-related instructions.
Adopted revisions to the preamble clarify treatment of issue papers in level 5. The revisions also reference U.S. Securities and Exchange Commission (SEC) rules and interpretations as sources of authoritative U.S. Generally Accepted Accounting Principles (GAAP) for SEC registrants and are effective upon adoption.
Adopted new Standard Accounting Principles (SAP) concept revisions allow residential mortgage loans held in qualifying statutory trusts to be captured in scope of SSAP No. 37. These revisions are effective Jan. 1, 2027, with early adoption permitted.
Adopted, with modification, certain revisions from Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, which was intended to reduce complexity in income tax accounting standards. The revisions also incorporate U.S. GAAP guidance from APB Opinion No. 28, which had previously been incorporated by reference. This adoption is effective for year-end 2025 reporting.
Adopted revisions, effective Dec. 31, 2026, incorporate a new reporting column to identify private placement securities in relevant investment schedules and an aggregate disclosure that details key investment information by type of public or private security.
Adopted revisions, effective Dec. 31, 2026, clarify the existing disclosure financial statement note location and frequency for debt security disclosures and incorporate disclosures for residuals that identify the company’s measurement method, whether the company is transitioning from the practical expedient to the allowable earned yield (AEY) method, and for those following the AEY method, information comparable to SSAP No. 43 for impaired securities.
Adopted revisions to SSAP No. 92 and SSAP No. 102 clarify that retirement plan assets can be held at net asset value (NAV) and shall be included in the required fair value disclosure. This adoption is effective for year-end 2025 reporting.
Exposed revisions to statutory guidance
All exposed revisions to statutory guidance, unless noted below, are classified as SAP clarifications with the public comment periods ending Feb. 13, 2026.
SAPWG exposed further revisions to clarify that sale leasebacks with restrictions on access to cash or assets received from the sale do not qualify for sale leaseback accounting and must be accounted for by the seller using the financing method.
Exposed revisions clarify how interest maintenance reserve (IMR) eliminated as part of a reinsurance transaction should influence the reinsurance collateral required to receive reinsurance credit. Exposure requests comments on whether different IMR treatment should be considered specifically, whether negative IMR eliminated from reinsurance transactions impact the reinsurance collateral. In other words, should net negative IMR be treated symmetrically with positive IMR, decreasing the collateral requirement upon derecognition?
A calculation template has been developed by the IMR Ad Hoc Group to determine whether reporting entities are sufficiently acquiring fixed-income instruments in comparison to their investable premium and sold fixed-income investments, and if the weighted average yield on the investments acquired is greater than the weighted average yield of the investments sold. Reporting entities that fail the proof would only be permitted to recognize in IMR current year realized losses that offset current year realized gains. If the reporting entity that failed the proof had additional realized losses, those losses would be recognized as a direct surplus impact and would not be recognized/deferred through IMR.
SAPWG is requesting feedback on this new SAP concept.
Exposed revisions consolidate and clarify the disclosure requirements for commitments and contingent commitments, including the addition of a definition for commitments to SSAP No. 5, and a new comprehensive commitments and contingent commitments disclosure to Note 14.
Exposed revisions to SSAP No. 56 explicitly address nonadmittance for assets held under the “general account basis” in the separate account, and proposed revisions to incorporate the concept of nonadmitted assets within the separate account balance sheet and corresponding schedules. Proposed effective date for this new SAP concept is Jan. 1, 2027.
Exposed agenda item proposes a review of several SSAP No. 48 concepts, and how they are applied to ensure intended guidance is clear and consistently applied. Items considered in the exposed SAP clarification include:
- Timing of recognition of equity value increases and decreases
- Acquisition of SSAP No. 48 investments at a discount with negative goodwill
- Application of goodwill and goodwill disclosures
- SSAP No. 48 reference to “basis difference”
- Negative investment income and impairment assessment
- Ownership percentage and related party codes
- Schedule BA “Data Originally Acquired”
SAP clarification exposes revisions to SSAP No. 1 to expand paragraph 23b to add reporting for assets held under a modified coinsurance (modco) and funds withheld arrangement. These changes include disclosure of 1) modco assets, 2) funds withheld assets and 3) collateral assets received and, on the balance sheet, excluding collateral held under security lending and repurchase agreements reported on the balance sheet.
Exposed revisions to SSAP No. 103 under the new SAP concept allow repurchase agreements with maturity dates in excess of one year to be admitted.
Exposed revisions clarify reporting resulting from principles-based bond definition, as well as modernize expense descriptions and categories.
Existing disclosure wording and annual statement instructions have resulted in inconsistent reporting of the gain or loss from Administrative Services Contracts required under note 18B. Exposed revisions to SSAP No. 47 under the SAP clarification correct inconsistencies in the calculation used to disclose gains/losses.
Effective Dec. 31, 2024, the Coverage Gap Discount Program ended and was replaced by the Manufacturer Discount Program on Jan. 1, 2025. It requires participating pharmaceutical manufacturers to sign an agreement with the Centers for Medicare & Medicaid Services to make their drugs eligible for Medicaid coverage. The participating drug manufacturers are required to provide discounts on eligible medications. SAP clarification exposes revisions note the end of the former program and add relevant references to the Manufacturer Discount Program.
Exposed revisions delete the shaded text instructions and delete previously superseded guidance in SSAP No. 40 currently shown as shaded text.
Exposed revisions provide guidance on the optional implementation period for Valuation Manual revisions regarding the economic scenario generator and non-variable annuities.
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