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

The Accounting Practices and Procedures (E) Task Force met Dec. 6, 2009. During this meeting, the Task Force discussed significant items and adopted reports of its working groups:

• The Emerging Accounting Issues (E) Working Group:
• Finalized two interpretations: 1) on the federal Term Assets-Backed Securities Lending Facility (TALF) program; and 2) on compiling rejected interpretations.
• Exposed one interpretation, which rejects GAAP guidance on own share lending arrangements.
• Deferred a request regarding the intent and ability impairment guidance, until work by the Statutory Accounting Principles (E) Working Group on Implementation Question and Answer for SSAP No. 43R—Loan-backed and Structured Securities – Revised (SSAP No. 43R) is complete.
• Deferred action on an Electronic Prescribing Transaction Service and referred a broader project on health insurers’ expenses to the Statutory Accounting Principles (E) Working Group for consideration.
• Rejected the exposed tentative consensus on re-securitizations (Re-REMICs).
• Adopted interim meeting minutes.
• The deadline for submission of comments and for new items is Feb. 11, 2010.

• The Statutory Accounting Principles (E) Working Group took the following actions:
• The Working Group adopted the following items:
  • SSAP No. 100—Fair Value Measurements
  • SSAP No. 62R—Property and Casualty Reinsurance – Revised (SSAP No. 62R), which expands the exceptions for retroactive reinsurance to include property/casualty reinsurance run-off agreements that meet specified criteria. Although this is less conservative than other methods of accounting for retroactive reinsurance, there are several criteria, including commissioner approval, financial strength of the nonaffiliated assuming entity and unlimited transfer of risk, without the ability to cancel the contract.
  • Disclosures on financial guaranty insurance.
  • Revisions to SSAP No. 43R—Loan-Backed and Structured Securities – Revised (SSAP No. 43R), which updates the statutory accounting guidance to reflect the revised “Residential Mortgage-Backed Securities Designation Process” originating from the Valuation of Securities (E) Task Force.
  • Issue Paper No. 140—Substantive Revisions to SSAP No. 43, which provides a historical reference of the guidance superseded by SSAP No. 43R—Loan-backed and Structured Securities – Revised (SSAP No. 43R).
  • Updates to the subsequent events guidance from FAS 165, Subsequent Events.
  • Updating references to the new Financial Accounting Standards Board (FASB) codification and GAAP hierarchy.
  • Revisions to the bond categories to mirror Blanks (E) Working Group changes.
  • Revisions to Appendices A-815 and A-830 in the Accounting Practices and Procedures Manual to reflect changes made to the corresponding model laws adopted by the Life and Health Actuarial Task Force. 

• The Working Group exposed the following:
  • Revisions regarding Guarantor’s Accounting and Disclosure Requirements for Guarantees
  • Issue Paper No. 141—Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities on FAS 166, Accounting for Transfers of Financial Assets – an Amendment to FAS 140 (FAS 166). Revisions to statutory accounting reflected in Issue Paper No. 141 include the establishment of new conditions for when a transferred financial asset can be accounted for as a sale, as well as removal of the concept of a qualifying special-purpose entity. In addition to exposing Issue Paper No. 141, the Working Group also formed a subgroup to review comments and assess the impact of adopting this guidance for statutory accounting.
  • Issue Paper No. 142—Variable Interest Entities (Issue Paper No. 142), which proposes adoption with modification of FAS 167, Amendments to FASB Interpretation No. 46R (FAS 167) in a new SSAP to provide guidance on variable interest entities. The subgroup formed to review Issue Paper No. 141 will also be charged with reviewing this item.
  • Revisions to the disclosures in SSAP No. 43R to clarify that some are only required for annual audited statutory financial statements with a two-week exposure period
  • Revisions rejecting Accounting Standards Update 2009-02: Omnibus Update – Amendments to Various Topics for Technical Corrections (ASU 2009-02) ASU 2009-02 for statutory accounting.
  • A proposal from the Securities Lending Subgroup, with a Jan. 29, 2010 comment deadline

• The Working Group took the following additional actions:
  • Formed a subgroup to review identified questions and establish answers to create a “Questions and Answer Implementation Guide” as an appendix to SSAP No. 43R.
  • Noted that FASB Staff Position (FSP) FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, is on the Working Group’s maintenance agenda but will continue to be deferred at this time.
  • Noted that the Guaranty Fund (E) Subgroup has exposed an issue paper, at the subgroup level until Jan. 15, 2010.
  • Adopted interim minutes from July 20, Oct. 5 and Nov. 2.
  • Approved a memo related to admission of deferred tax assets to the chair of Financial Condition (E) Committee.
  • The deadline for submission of comments or for new items, unless otherwise noted, is Feb. 11, 2010.

• The Blanks (E) Working Group:
  • Adopted four blanks proposals.
• Exposed 10 proposals for comment. The comment deadline on all new proposals is Feb. 24, 2010.
• Adopted interim meeting minutes from an Oct. 9 conference call.
• Deferred action on a proposal to break out director and officer into a separate line and simultaneously referred it to the Line of Business (E) Subgroup of the Blanks Working Group.
• Received a memo from the Life and Health Actuarial Task Force related to Interrogatory 9.2 of the Life & Health Annual Statement regarding Actuarial Guideline 43.
• Received memos from the Statutory Accounting Principles (E) Working Group on disclosures related to deferred tax assets, financial guaranty insurance and subsequent events that reporting entities will need to prepare for year-end 2009.
• Adopted the listing of editorial changes