Issues & Trends | January 2020

Insurance: NAIC 2019 fall meeting

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


NAIC 2019 fall meeting

  • All insurance companies

Relevant dates

  • Effective immediately, unless otherwise indicated

Report contents

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

  • Revisions to SSAP No. 61R and Appendix A-791 to add disclosures and Q&A guidance for contracts with medical loss ratios and risk transfer for yearly renewal term (YRT) reinsurance contracts for group term life business. The disclosures are effective December 31, 2020 and the YRT reinsurance guidance is effective for contracts in effect as of January 1, 2021.
  • Revisions to SSAP No. 68 to clarify that goodwill resulting from an insurer’s acquisition of a Subsidiary, Controlled or Affiliated (SCA) entity when pushdown accounting is applied should be included in the goodwill admittance limitation. This change is effective for 2019 year-end reporting.
  • Revisions to SSAP No. 86 to clarify that derivatives not used in hedging, income generation or replication transactions should be reported at fair value and nonadmitted.
The NAIC exposed revisions to the following guidance:
  • SSAP No. 25 clarifying the types of entities that would be considered related parties, including a noncontrolling interest greater than 10%.
  • SSAP No. 32R and a revised issue paper to improve the preferred stock definitions, revise the measurement guidance and clarify the impairment guidance for preferred stock.
  • SSAP No. 105 to include certain changes recommended by interested parties that would allow more working capital finance investments to qualify under this guidance.
  • SSAP No. 97 to require the assignment of the purchase price and goodwill to entities within downstream holding companies and adding a disclosure of the goodwill allocation.
  • SSAP Nos. 3 and 51R to add accounting guidance and disclosures for the change in valuation basis resulting from the adoption of VM-21 beginning January 1, 2020.

The NAIC exposed a request for comments on whether pushdown accounting should be rejected, permitted for non-insurance entities, or permitted only for US SEC registrants.



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