This report summarizes key activities of the National Association of Insurance Commissioners (NAIC) Statutory Accounting Principles (E) Working Group (SAPWG) who met on Jan. 27, 2022 in a virtual interim meeting, to discuss revisions to statutory accounting guidance. Our insurance Value Architects™ attended this meeting to monitor regulatory updates.
Insurance organizations should take note of these changes as they are effective for year-end 2021 reporting.
All adopted revisions to statutory guidance noted below are considered effective immediately after adoption by SAPWG.
Ref #2021-18: VM-21 Scenario Consistency Update
SSAP No. 108 – Derivatives Hedging Variable Annuity Guarantees
Adopted revisions provide consistency with VM-21: Requirements for Principle-Based Reserves for Variable Annuities (VM-21) with regard to the amortization of deferred assets and deferred liabilities by 1) removing reference to the “standard scenario” and 2) adding reference to the conditional tail expectation (CTE) 70 as well as reference the VM-21’s guidance which allows a reporting entity to choose the company specific market path or CTE with prescribed assumptions to calculate prescribed projection amounts for reserve purposes.
Ref #2021-31: Life Reinsurance Disclosure Clarifications
SSAP No. 61R - Life and Health Reinsurance
Adopted revisions to SSAP No. 61R clarify life reinsurance disclosures which were new for 2020 reporting in response to questions from the American Institute of Certified Public Accountants (AICPA) NAIC Task Force. The proposed revisions, summarized below, narrow the scope of the disclosures, and clarify what is required in the disclosures.
For more information on these topics, or to learn how Baker Tilly’s insurance industry Value Architects™ can help, contact our team.