Issues & Trends | August 2019

Insurance: NAIC 2019 summer meeting

KPMG reports on actions taken on conference calls and at the Summer 2019 meeting of the National Association of Insurance Commissioners. The NAIC discussed recent accounting change and regulatory developments impacting insurance companies. 


NAIC 2019 summer meeting

  • All insurance companies

Relevant dates

  • Effective immediately, unless otherwise indicated

Key impacts

On conference calls and at its Summer meeting, the National Association of Insurance Commissioners (NAIC) adopted the following guidance.

  • SSAP No. 22R on lease accounting and the related issue paper rejecting US GAAP guidance on operating leases. Additional revisions incorporate, with modification, US GAAP guidance on sale-leaseback transactions, lessor accounting and leveraged leases.
  • Revisions to the Valuation Manual to limit the yearly renewable term (YRT) reinsurance reserve credit to the cost of insurance (½ cx) with a three-year carve-out for policies issued in years 2017 through 2019. 
  • AG 43 and changes to VM-01 and VM-21 to incorporate the variable annuities framework into the Valuation Manual.
  • Credit Reinsurance Model Law and Credit for Reinsurance Model Regulation.

The NAIC exposed the following guidance.

  • SSAP No. 43R to exclude from its scope collateralized fund obligations (CFOs) and similar structures that reflect underlying equity interest but are issued in the form of bonds/debt instruments. The revisions also prevent existing equity assets owed by the insurer from being repackaged as a securitization and reported as a long-term bond.
  • SSAP No. 61R and Appendix A-791 to add guidance and disclosures about reinsurance contracts. 
  • SSAP No. 68 and SSAP No. 97 to clarify that goodwill resulting from an insurer’s acquisition of a Subsidiary Controlled or Affiliated (SCA) entity when pushdown is applied should be included in the goodwill admittance limitation.
  • SSAP No. 97 requiring the assignment of the purchase price and goodwill to entities within downstream holding companies and adding disclosure of the goodwill allocation. 

Report contents

  • Meeting highlights
  • Investments
  • Other accounting highlights
  • Principle-based reserving
  • Variable annuities
  • Group capital calculation
  • Covered agreement
  • Risk-based capital



Subscribe to our newsletter

Receive timely updates on accounting and financial reporting topics from KPMG.