Insurance: NAIC 2022 Summer meeting

Applicability

• All insurance companies

Key impacts

The National Association of Insurance Commissioners (NAIC) adopted the following guidance: 

• SSAP No. 86 to expand effective hedge relationships consistent with ASU 2017-12.
• Revisions to VM-20 and VM-21 to reflect all future hedging strategies.
• An actuarial guideline on modelling of complex assets in asset adequacy testing.

The NAIC exposed revisions to the following guidance:

• SSAP Nos. 19 and 73 to clarify that when a lease terminates early, the amortization of leasehold improvements would cease, and any remaining unamortized leasehold improvement balance would be expensed. There would be an exclusion for healthcare delivery assets.
• SSAP Nos. 26R and 43R that would define investments eligible to be reported as a bond on Schedule D-1. The exposure also includes a revised bond definition and related issue paper.
• SSAP No. 86 to adopt, with modification, US GAAP guidance regarding portfolio-layer method fair value hedging and fair value partial-term hedging.
• Nullification of INT 03-02 to eliminate inconsistent guidance with SSAP No. 25 for economic and non-economic related-party transactions.
• A memorandum on alternatives to add fixed income analytical risk measures to investments reported on Schedule D, Part One. 

The NAIC discussed the following guidance:

• Progress of the Economic Scenario Generator (ESG) field test.

Report contents

• Meeting highlights
• Accounting highlights
• Actuarial highlights   
• Group capital calculation
• Risk-based capital
• Valuation of Securities Task Force
• Group Solvency
• Financial Stability Task Force
• Climate risk
• KPMG Financial Reporting View
• Acknowledgments