Accounting Practices and Procedures (E) Task Force
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Joint Executive (EX) / Plenary Committee Summary Report
Fall 2009 Meeting Summaries Index

The Accounting Practices and Procedures (E) Task Force met Sept. 22, 2009.

During this meeting, the Task Force:

  • Adopted the proposed 2010 charges of the Task Force and its working groups.
  • Adopted the interim minutes of the Statutory Accounting Principles Working Group, as discussion ran long at the Working Group meeting. 
    • Aug. 5 on SSAP No. 43R
    • Aug. 20 on DTA presentation from the ACLI
    • Sept. 14 on SSAP No. 43R
  • Discussed significant items and adopted reports of its working groups:
    • The Emerging Accounting Issues Working Group:
    • Finalized two interpretations.
    • Exposed three interpretations: on Re-REMICs, the federal TALF program, and on compiling rejected interpretations with an Oct. 28, 2009 comment deadline.
    • Deferred one item.
    • Approved interim minutes.
    • The Blanks Working Group took one significant action on expanding the title state pages, effective for 2012. The Working Group also:
    • Adopted a total of eight blanks proposals.
    • Exposed five proposals for comment. The comment deadline on all new proposals is Nov. 5, 2009.
    • Exposed guidance for the Web site on three items with a two-week comment deadline ending Oct. 5. 2009.
    • Received a memo from the SAPWG on disclosures form SSAP No. 43R.
    • Adopted the listing of editorial changes. 
    • The Property and Casualty Reinsurance Study Group’s held a conference call to provide technical input to the Statutory Accounting Principles Working Group on the property and casualty reinsurance run-off proposal.
    • The Statutory Accounting Principles Working Group:
    • Adopted substantive revisions to SSAP No. 10—Income Taxes (Ref #2009-06) to allow increased admittance of deferred-tax assets (DTAs) for companies with a risk-based capital calculation that exceeds a stated percentage. The motion adopted the previously exposed SSAP No. 10 with the following modifications:
    • Modifications to paragraphs 10e.i and 10.e.ii.a to require that admitted DTAs should correspond with IRS tax-loss carryback provisions, not to exceed three years.
    • Modification to paragraph 10.f.i to clarify that by regulation, DTAs may not be used for determining any regulatory trigger that involves admitted assets and/or statutory surplus. This would include triggers contained in the Insurance Holding Company System Regulatory Act (#440)—i.e., determination of ordinary or extraordinary dividends—as well as investment limitations and grounds for rehabilitation and liquidation.
    • Addition of paragraph 10.f.iii to require DTAs to be reported as an aggregate write-in for surplus.
    • A sunset provision that expires with year-end Dec. 31, 2010, financial statements.
    • Formation of a Deferred Tax Asset Subgroup to further evaluate and conclude on the appropriate calculation of admitted DTAs to be applied with financial statements filed after Dec. 31, 2010, including a study of the realization of DTAs.

The Task Force held a robust discussion on the merits of adopting the changes to SSAP No. 10 related to deferred tax assets. This issue was divided from the rest of the adoption of the Statutory Accounting Principles Working Group report and received a separate vote from the Task Force. A separate proposal to not proceed with this adoption and to study and analyze the issue more was defeated, with a vote of 13 yes, 15 no, with two states abstaining. After discussion, the Task Force voted to adopt the report of the Statutory Accounting Principles Working Group, including proceeding with the adoption of the SSAP No. 10 changes that were adopted by Working Group.

    • Adopted three issue papers: 
    • Issue Paper No. 137, Transfer of Property and Casualty Reinsurance Agreements in Run-Off (Ref # 2008-28).
    • Issue Paper No. 135—Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Others (Ref # 2003-12).
    • Issue Paper No. 138—Fair Value Measurements (Ref # 2007-24).
    • Exposed for comment nonsubstantive disclosures on separate accounts and financial guaranty insurance.
    • Rejected one GAAP statement.

Due to time restrictions, the Statutory Accounting Principles Working Group did not address several items included on the agenda. The Working Group will conduct a conference call shortly after the Fall National Meeting to address these items. The deadline for submission of comments and for new items is Oct. 28, 2009.

 

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