Issues & Trends | April 2020

Insurance: SAPWG 2020 spring meeting

KPMG reports on actions taken on conference calls by the Statutory Accounting Principles Working Group in spring 2020. SAPWG discussed recent accounting changes impacting insurance companies.


NAIC 2020 spring meeting

  • All insurance companies 

Relevant dates

  • Effective immediately, unless otherwise indicated

Key impacts

SAPWG adopted the following guidance:

  • Revisions to SSAP Nos. 5R and 97 to require insurers to track unreported equity method net losses of an investment in a subsidiary, controlled and affiliated (SCA) entity, and to record a liability under SSAP No. 5R to the extent there is a financial guarantee or commitment.
  • INT 20-03 to adopt guidance from the Coronavirus Aid, Relief and Economic Security (CARES) Act and joint statement of the federal and state banking regulators on the approach to account for certain loan modifications in response to COVID-19.
  • INT 20-04 to provide limited time exceptions to defer impairment assessments for bank loans, mortgage loans, and investments that predominantly hold underlying mortgage loans that are affected by forbearance or modifications in response to COVID-19.

 SAPWG exposed revisions to the following guidance:

  • SSAP Nos. 3 and 51R to add disclosures for the change in valuation basis resulting from the adoption of VM-21 for years beginning January 1, 2020.
  • 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. Revisions would be effective January 1, 2021.
  • SSAP No. 68 to expand goodwill disclosures and clarify the reporting of an investment in a SCA entity on Schedule D.
  • SSAP No. 97 to require the assignment of the purchase price and goodwill to entities within downstream holding companies when pushdown accounting has not been applied, and to add disclosure of the goodwill allocation.
  • SSAP No. 105 and the related issue paper to include certain changes recommended by interested parties that would allow more investments to qualify under this guidance. The proposed effective date for these changes is June 30, 2020.