The Statutory Accounting Principles (E) Working Group is responsible for developing and adopting substantive, nonsubstantive and interpretation revisions to the NAIC Accounting Practices and Procedures Manual (AP&P Manual). The AP&P Manual provides the basis for insurers to prepare financial statements for financial regulation purposes.
Substantive statutory accounting revisions introduce original or modified accounting principles. Substantive revisions can be reflected in an existing Statement of Statutory Accounting Principles (SSAP) or a new SSAP. Nonsubstantive statutory accounting revisions are characterized as language clarifications that do not modify the original intent of a SSAP. SSAP’s are considered the highest authority (Level 1) in the statutory accounting hierarchy.
An interpretation to an existing SSAP may be developed to provide timely application, interpretation or clarification guidance. Revisions classified as an interpretation shall not amend, supersede or conflict with existing, effective SSAPs. Interpretations are considered the second highest authority (Level 2) in the statutory accounting hierarchy.
Items for consideration by the Working Group can be submitted via a SAPWG Maintenance Agenda Submission Form (Form A) to the NAIC staff support listed on this web page.
- Maintain codified statutory accounting principles by providing periodic updates to the guidance that address new statutory issues and new generally accepted accounting principles (GAAP) pronouncements as they develop.—Essential and Ongoing
- At the discretion of the chair, comment on exposed GAAP pronouncements affecting financial accounting and reporting.—Essential
- Report its findings relative to these developing issues to the Accounting Practices and Procedures (E) Task Force.—Essential
- Provide comments on issues related to evaluating and or implementing to International Financial Reporting Standards (IFRS) for possible U.S. statutory accounting use and provide input on the solvency modernization project as it relates to accounting and reporting issues.—Essential and Ongoing
- Coordinate with the Life Actuarial (A) Task Force on changes to the Accounting Practices and Procedures Manual related to the Valuation Manual VM-A, Requirements, and VM-C, Actuarial Guidelines, and other valuation manual requirements. This process will include the receipt of periodic reports on changes to the valuation manual on items that require coordination as well as the development of an accounting mechanism to address reserve volatility.—Essential and Ongoing
- Obtain, analyze and review information on permitted practices, prescribed practices or other accounting treatments suggesting that issues or trends occurring within the industry may compromise the consistency and uniformity of statutory accounting, including but not limited to activities conducted by insurers for which there is currently no statutory accounting guidance or where states have prescribed statutory accounting that differs from the guidance issued by the NAIC. Utilize this information to consider possible changes to statutory accounting.—Essential
- Develop and adopt changes to SSAP No. 86—Accounting for Derivative Instruments and Hedging Activities, with an effective date of Jan. 1, 2017, or earlier, which allow hedge accounting treatment under SSAP No. 86 for certain limited derivative contracts (e.g., interest rate hedges with counterintuitive effects) that otherwise do not meet hedge effectiveness requirements. In adopting such an allowance, consider if the requirement to meet hedge effectiveness can be replaced by some other information that demonstrates strong risk management is in place over the identified hedges.—Essential
- Finalize public disclosure on variable annuity risks as developed by the Variable Annuities Issues (E) Working Group.—Essential
- Consider whether current or future changes to reserves resulting from implementation of the Variable Annuities Framework will be reported in the Annual Statement as a “Change in basis.”—Essential
- Provide authoritative guidance on current statutory accounting issues, generally relating to application, interpretation and clarification of existing statutory accounting principles, by conducting meetings at NAIC national meeting sites and other meetings and conference calls when necessary.—Essential and Ongoing
- Evaluate individual statutory accounting issues based on its established timeline and report its findings to the Accounting Practices and Procedures (E) Task Force.—Essential and Ongoing
The following Subgroup reports to the Statutory Accounting Principles Working Group:
Statutory Accounting Principles Working Group
Last Updated: December 16, 2015
For revisions adopted by the Working Group, please refer to the Accounting Practices and Procedures Manual Updates Web page
Exposure Drafts Outstanding
Statutory Accounting Principles Working Group
Last Updated April 6, 2016
Please address comment letters to Dale Bruggeman, Chair of the Statutory Accounting Principles (E) Working Group, and direct to firstname.lastname@example.org, email@example.com, firstname.lastname@example.org and email@example.com.
NOTE: All items have a comment deadline of May 20, 2016, with the exception of agenda item 2016-03, which has an extended comment period ending June 5, 2016.
*Please forward all comment letters to firstname.lastname@example.org, email@example.com, firstname.lastname@example.org and email@example.com.
||Issue Paper/ SSAP No./ Appendix
|EXPOSURES With COMMENT DEADLINE OF July 20, 2016
||SSAP No. 26
||Investment Classification Project: SVO-Identified ETFs in SSAP No. 26
||Exposed draft revisions to SSAP No. 26—Bonds to incorporate revised guidance for SVO-Identified Exchange Traded Funds (ETFs)
|EXPOSURES With COMMENT DEADLINE OF JUNE 5, 2016
||Special Accounting Treatment for Limited Derivatives
||Exposed agenda item with a request for comment on concepts for a “special accounting provision” drafted in response to the charge to consider “hedge accounting treatment” for certain limited derivatives related to variable annuity products that do not meet hedge effectiveness requirements.
|EXPOSURES With COMMENT DEADLINE OF MAY 20, 2016
||SSAP No. 55
||Clarification of Accounting Treatment for Fees Incorrect for Salvage/Subrogation Recoveries
||Nonsubstantive revisions proposed by interested parties to clarify the reporting of salvage and subrogation expenses.
||SSAP No. 97
||Inclusion of Filing Guidance
||Nonsubstantive revisions propose a new appendix detailing the subsidiary, controlled and affiliated entities filing process.
||Quarterly Reporting of Investment Schedules
||Exposure details alternatives for quarterly investment reporting offered by interested parties. This agenda item is considering reporting revisions to expand investment information received in the interim.
||SSAP No. 3
||Correction of an Error Clarification
||Nonsubstantive revisions clarify that guidance in SSAP No. 3 pertains to accounting errors and shall not preclude companies from amending their annual or quarterly financial statement filings due to reporting errors. Exposure also includes interested parties’ comments and the NAIC staff response.
||SSAP No. 86
||Definition of Notional
||Nonsubstantive revision proposes the definition of “notional,” reflecting language suggested by the industry.
||SSAP No. 1
||Clarification of Permitted Practice Disclosure
||Nonsubstantive revisions clarify the disclosure requirements for prescribed or permitted practices.
||SSAP No. 22
||Exposed substantive agenda item with a request for comments on different statutory accounting options for leases.
SSAP No. 26
SSAP No. 30
|Removal of the Class 1 List from the P&P Manual
||Nonsubstantive revisions in response to the removal of the Class 1 Money Market Mutual Fund List from the P&P Manual.
||SSAP No. 26
SSAP No. 30
SSAP No. 32
SSAP No. 43R
SSAP No. 100
||Nonsubstantive revisions reject ASU 2016-01 while requesting comments on whether elements in ASU 2016-01 should be considered for statutory accounting.
||Appendix F – Policy Statement on Coordination with P&P Manual, SVO and VOSTF
||Nonsubstantive revisions propose a new policy statement detailing coordination with the P&P Manual and the Valuation of Securities (E) Task Force.