NAIC 2015 Summer National Meeting Highlights
By Jean Adams-Harris, CFE, CPA, CISA, AES, MCM, Principal - Regulatory Services and Kia Bickel, CPA, Senior Manager

The NAIC held its 2015 Summer National Meeting in Chicago from August 13 to 18.  Highlights of the Statutory Accounting Principles Working Group (SAPWG) discussions are outlined below.

Continued from the eInterpreter...

Disclosures about Short-Duration Contracts (Ref #2015-37)

Since the FASB issued Accounting Standards Update 2015-09 requiring additional disclosures for short-duration contacts, there has been limitless speculation as to how this could impact statutory-basis reporting.  The recently-adopted GAAP disclosures parallel Schedule P in many respects, but differ on potentially critical matters, such as the appropriate level of aggregation or disaggregation.  The SAPWG requested interested parties comment and highlight the differences between current statutory disclosures and the new GAAP disclosures.

 

High Deductible Workers’ Compensation Policies (Ref #2015-35)

The growing use of high deductible workers’ compensation policies, particularly by professional employer organizations, have regulators concerned that insurers are exposed to increasing levels of credit risk.  For instance, an insured may be unable to pay its deductible when a claim occurs.  This issue was discussed at length and the NAIC staff has proposed requiring two disclosures:

  • Top 10 insureds with high deductible obligations, regardless of collateralization
  • Unsecured high deductible balances over 3% of policyholder surplus

Insurance-Linked Securities (Ref #2015-34)

Insurance-Linked Securities (ILS), such as sidecars and life insurance securitization, are receiving attention as the ILS market is rapidly expanding.  Concerned about the lack of transparency in the financial statements, regulators are considering developing disclosures that would capture key ILS information such as terms, risks and the financial statement impact of ILS.

Expanded Quarterly Reporting of Investments (Ref #2015-27)

Regulators are looking for ways to obtain data to identify industry-wide investment risks and impairments in a more timely manner.  A proposal requiring a full set of investment disclosures each quarter was exposed for comment.  However, interested parties questioned whether the costs they would incur to prepare those disclosures are worth the regulators’ perceived benefit.

For detailed information on the above referral #’s, visit http://www.naic.org/committees_e_app_sapwg.htm and scroll to the Exposure Drafts Outstanding table at the bottom of the webpage.

Please contact one of the following NAIC 2015 Summer National Meeting attendees with questions on the activities of the NAIC:

Name

Title

Email

Jean Adams-Harris

Principal

jharris@johnsonlambert.com

Kia Bickel

Senior Manager

kbickel@johnsonlambert.com

Joanne Smith

Manager

jsmith@johnsonlambert.com

For more information, contact: Jean Adams-Harris at jharris@johnsonlambert.com or Kia Bickel at kbickel@johnsonlambert.com.

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