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Key Impacts

The National Association of Insurance Commissioners adopted the following guidance:

• SSAP No. 1 to add a restricted asset disclosure for modified coinsurance (Modco) and funds withheld assets reported on a cedent’s financial statements, and a reconciliation between the restricted assets in the disclosure and those reported in the general interrogatories.
  
• SSAP No. 56 to update the recognition and measurement guidance for the transfer of assets in exchange for cash between the general account and book value separate accounts.
  
• INT 24-02 and revisions to INT 05-05 to add guidance for the Medicare Part D Prescription Payment Program (MPPP).

The NAIC exposed revisions to the following guidance:

• SSAP No. 1 and the Annual Statement to expand disclosures for restricted assets to identify whether the Modco and funds withheld assets are related to or affiliated with the reinsurer.
• SSAP No. 7 to (1) define interest maintenance reserve (IMR) and (2) remove hypothetical IMR.
• SSAP No. 22 to clarify that sale leasebacks with restrictions on access to the cash proceeds do not qualify for sale leaseback accounting.
  
• SSAP No. 84 to add disclosures for the MPPP.
  
• Recommendation to include information on Modco and funds withheld assets in Schedule S, Part 8 of the Life and Fraternal Annual Statement, and remove previously recommended Schedule F, Part 7 in the Property and Casualty Annual Statement.

The NAIC discussed the following guidance:

• Comments received on the proposal to develop new statutory accounting guidance for interest-rate hedging derivatives that do not qualify as effective hedges under SSAP No. 86 but are used for asset-liability management.
• Options to clarify guidance for investments in noninsurance subsidiary, controlled or affiliated entities that hold assets for the benefit of the insurer and its affiliates.