Issues and Trends | September 2022

 

Insight

Insurance: NAIC 2022 Summer meeting

We report on actions and discussions about ongoing projects on conference calls and at the 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

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