Insurance statutory reporting – May 2019

KPMG summarizes new and revised statutory accounting standards for 2018 and 2019 financial reporting by insurance companies. This follows the discussions and new guidance adopted by the NAIC on conference calls and at its 2019 Spring Meeting.

Applicability

  • All insurance companies

Relevant dates

  • Effective immediately

Key impacts

Effective for 2018 reporting

  • SSAP No. 26R provided separate accounting guidance for the use of systematic value for SVO-identified investments that was effective January 1, 2018
  • SSAP No. 100R allowed the use of net asset value (NAV) per share as a practical expedient and added disclosures
  • INT 18-03 provided guidance about the accounting for the repatriation transition tax (RTT), the alternative minimum tax (AMT) credit and the global intangible low-taxed income tax (GILTI) from the Tax Cuts and Jobs Act (TCJA)

Effective for 2019 reporting and after

  • SSAP Nos. 2R, 26R, and 86 revisions stated that structured notes, except for mortgage-referenced securities, should be reported as derivatives under SSAP No. 86. The revisions included mortgage-referenced securities in the scope of SSAP 43R.  Effective December 31, 2019
  • SSAP No. 16R adopted, with modification, the US GAAP guidance for implementation costs of a cloud hosting arrangement. Effective January 1, 2020, with early adoption permitted
  • SSAP No. 30R expanded the definition of common stock to include US SEC registered closed-end funds and unit-investment trusts and foreign registered open-end investment funds
  • SSAP No. 69 clarified that restricted cash and cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period totals shown on the statement of cash flow
  • SSAP No. 86 incorporated the hedge effectiveness documentation requirements included in the recent targeted improvements to the US GAAP derivative accounting model. Early adoption permitted for year-end 2018 and includes specific early adoption requirements for insurers that also prepare US GAAP financial statements
  • SSAP No.108 prescribed accounting and reporting guidance for derivatives that hedge interest rate risk of variable annuity guarantees reserved under VM-21. Effective January 1, 2020, with early adoption permitted as of January 1, 2019

Report contents

  • Overview of new statutory guidance
  • 2018 reporting
  • 2019 reporting and later

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