Statutory Accounting Principles Working Group
Financial Condition (E) Committee
Accounting Practices and Procedures Task Force

The Statutory Accounting Principles Working Group has the responsibility of developing and proposing new Statements of Statutory Accounting principles (SSAPs). The SSAPs represent the top level of requirements in the statutory hierarchy of accounting requirements and are included in the NAIC Accounting Practices and Procedures Manual (AP&P Manual). New SSAPs will be developed periodically that: 1) address issues not covered by existing Statutory Accounting Principles (SAP) guidance; 2) amend existing SSAPs; or 3) supersede existing SSAPs.

The first step in developing new SSAPs will usually be the drafting of an Issue Paper (IP) containing summary conclusion, discussion and relevant literature sections. Public comment will be solicited on the IPs, and at least one public hearing will be held on an IP before it is converted to a SSAP. The SAPWG relies upon NAIC staff to perform research and drafting on new SSAPs and may enlist the assistance of interested parties with requisite technical expertise as needed.

Items for consideration by the SAPWG can be submitted via a Form A to NAIC staff support.

2013 Charges

Maintain codified statutory accounting principles by providing periodic updates to the guidance that address new statutory issues and new GAAP pronouncements as they develop.

At the discretion of the chair, comment on exposed GAAP pronouncements affecting financial accounting and reporting.

Report its findings relative to these developing issues to the Accounting Practices and Procedures (E) Task Force.

When a class of securities is being reviewed by the Invested Assets (E) Working Group, the chair of the Statutory Accounting Principles (E) Working Group, or his or her representative, will be deemed a member of the Invested Asset (E) Working Group of the Valuation of Securities (E) Task Force. The chair, or his/her representative, is charged with contributing the applicable perspective and expertise of the regulatory group to the development of NAIC regulatory guidance for the security under review by the Invested Asset (E) Working Group.

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.

Exposure Drafts Outstanding
Statutory Accounting Principles Working Group
Last Updated April 15, 2013

Please address comment letters to Dale Bruggeman, Chair of the Statutory Accounting Principles (E) Working Group, and direct to jgann@naic.org and rmarcotte@naic.org.

The following items have a shortened comment period ending April 26.

#2012-15 & 2012-16 – Policyholder Loyalty / DDR Reserves Survey;
#2012-23 – Seed Money Disclosures;
#2012-33 – Title Insurance Loss and Loss Adjustment Reserves;
#2013-11 – Restricted Asset Disclosure;
#2013-12 – DTA Admissibility Test for Financial & Mortgage Guarantees

Note: Comments should also be provided on 2011-38: Fees Payable to the Federal Government by Health Insurers as requested during the 2013 Spring National Meeting. A call to discuss is planned for May 20, 2013.

The comment deadline for exposed items, unless otherwise noted, and to submit new items is May 31:

Ref No.	Issue Paper/ SSAP No./ Appendix	Title	Description
COMMENT DEADLINE – APRIL 26, 2013
2012-15 2012-16	None	Survey on Policyholder Loyalty Programs and DDR Reserves	Proposed survey has been posted to allow for review and comments from regulators and industry on the clarity of the survey questions and the planned scope (all p/c companies) before distribution. This is not an exposure of proposed statutory accounting principles. Comment Deadline: April 26
2012-23	SSAP No. 56	Seed Money Disclosure in SSAP No. 56	Recommends nonsubstantive revisions to include new disclosures pertaining to seed money, fees and expenses and additional required surplus amounts in separate accounts. Exposure includes proposed revisions to the separate account general interrogatory. Revisions from the prior (Nov. 2012) exposure are shaded. Comment Deadline: April 26
2012-33	SSAP No. 57	Title Insurance Loss Reserves	Proposes nonsubstantive revisions to clarify title insurance loss and LAE reserves. Revisions from the prior (March 2013) exposure propose to eliminate reference to A-628 as well as incorporate additional clarifying changes. Comment Deadline: April 26
2013-11	SSAP No.	Accounting Disclosures for Restricted Assets	Proposes nonsubstantive revisions to improve the consistency of information disclosed for restricted assets Revisions from the prior (March 2013) exposure are shaded. Comment Deadline: April 26
2013-12	SSAP No. 101	DTA Admissibility Test for Financial & Mortgage Guarantees	Proposes nonsubstantive revisions to clarify the DTA admittance limitation calculation (paragraph 11b). Revisions propose to incorporate the ”Footnote Emphasis” examples into the SSAP No. 101 implementation guide. Comment Deadline: April 26
EXPOSURES WITH COMMENT DEADLINE OF MAY 31, 2013:
2011-45	SSAP No. 62R	Impact of Transfer on Provision for Reinsurance	Nonsubstantive revisions to address situations where the collection risk for third party reinsurance contracts has been transferred and secured by the counterparty to a loss portfolio transfer when a novation or assignment has not occurred.
2013-02	SSAP No. 21 & SSAP No. 92	EITF 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements	Nonsubstantive revisions to adopt with modification EITF 06-4 and reflect the impact of endorsement split-dollar life insurance arrangements.
2013-03	New SSAP SSAP No. 104 or IP No. 99	EITF 00-18, Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees	Nonsubstantive issue, requesting comments on prevalence of share-based payments with non-employees. Based on comments, the Working Group will consider statutory revisions to encompass these transactions. If not prevalent, the working group will consider rejection of EITF 00-18 as not applicable to statutory accounting.
2013-04	IP No. 99	ASU 2013-02, Comprehensive Income – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income	Nonsubstantive revisions to reject ASU 2013-02 as not applicable to statutory accounting.
2013-05	Appendix H	Nullified and Superseded SSAPs and INTs within the AP&P Manual	Nonsubstantive revisions to document a new process to remove 100% superseded or nullified SSAPs and INTs from the printed manual and include these items on the Accounting Practices and Procedures Manual password-protected updates Web page.
2013-06	SSAP No. 100	ASU 2013-03, Financial Instruments: Clarifying the Scope and Applicability of a Particular Disclosure to Nonpublic Entities	Nonsubstantive revisions to reject ASU 2013-03 in SSAP No. 100. This ASU is only for nonpublic entities and guidance for reporting fair value and the corresponding fair value hierarchy level is already required in SSAP No. 100 for all reporting entities.
2013-07	SSAP Nos. 64, 86, 103	ASU 2013-01: Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities	Nonsubstantive revisions illustrated in Option 1 allow companies to continue offsetting derivatives, repurchase and reverse repurchase agreements, and securities borrowing and securities lending transactions with a valid right of offset, but incorporate disclosures to illustrate the netting impact.
2013-08	SSAP No. 40	Clarification of SSAP No. 40–Real Estate Investments	Nonsubstantive revisions to clarify the definition of encumbrances.
2013-13	SSAP Nos. 86	Derivative Investment Reporting	Substantive issue – exposed concept revisions for 1) accounting of collateral posted or received in accordance with derivative transactions; and 2) accounting for futures and forwards with specialized daily true-up features.
2013-14	SSAP Nos. 62R	Accounting for Portfolio Reinsurance Agreements between Affiliated Entities That Do Not Result in Surplus Gains	Substantive issue - Exposed this agenda item and the proposed revisions suggested by the sponsor. This item is exposed for information gathering purposes and the exposure should not imply that the position within this agenda item or the suggested revisions are supposed by a majority of the Working Group.

*Please forward all comment letters to jgann@naic.org and rmarcotte@naic.org.

A full list of NAIC conference calls & interim meetings is available on the NAIC Conference Call Calendar.

Conference Call
Monday, May 20, 2013
11:30 a.m. ET / 10:30 a.m. CT
Topic: ACA Fees in 2014 and thereafter (Ref #2011-38

Comments on 2011-38: Fees Payable to the Federal Government by Health Insurers are due May 14, and should be addressed to Dale Bruggeman, Chair of the Statutory Accounting Principles (E) Working Group, and directed to rmarcotte@naic.org and jgann@naic.org.

Introduction to
Statutory Accounting Principles
Two-Week Online Self-Study Course

Brochure with Registration Form

Relating SVO Unit Prices to the Fair Value Hierarchy

Residential Mortgage Backed Securities (RMBS) Initiative Web Site

Accounting Practices and Procedures Manual Updates

SSAP No. 43R flowchart

SAPWG Maintenance Agenda Submission Form (Form A)
See Policy Statement on SAPWG Maintenance Agenda Process for description and instruction. After completion of the Form A, please send to statacct@naic.org for NAIC staff review. NAIC staff will send a confirmation of receipt. In order for NAIC staff to place the Form A on the Agenda, the Form A must be received no later than the comment deadline.

Maintenance Agenda
April 2012

SAP to Annual Statement Disclosure Checklist Updated for 2012 Annual Statements

Please note, in an effort to go green, the spreadsheets are spaced to view the entire width on a computer screen. At other percentages or if printing, some detail may be lost.

Policy Statements
See Appendix F – Policy Statements of the Accounting Practices and Procedures Manual for a complete listing.

Minutes for the four most recent NAIC National Meetings are available free for meeting attendees and members. Members may access minutes via StateNet. If you do not know your User ID or password, please contact the NAIC Help Desk.

Accounting Practices and Procedures Manual

Annual and Quarterly Statement Instructions

States' Prescribed Differences from NAIC Statutory Accounting Principles

Media queries should be directed to the NAIC Communications Division at 816-783-8909 or news@naic.org.

Julie Gann
Senior Manager - Accounting and Reporting
Phone: 816-783-8966
Fax: 816-460-7821

Robin Marcotte
Senior Manager – Accounting and RBC
Phone: 816-783-8124
Fax: 816-460-7571

Please see the current Committee List for a complete list of committee members.

Statutory Accounting Principles Working Group Financial Condition (E) Committee Accounting Practices and Procedures Task Force

Statutory Accounting Principles Working Group
Financial Condition (E) Committee
Accounting Practices and Procedures Task Force