Insurance: NAIC 2023 Summer meeting

Applicability

• All insurance companies

Key impacts

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

• Revisions to SSAP Nos. 26R, 43R and other SSAPs to add guidance for the principles-based bond definition.
• INT 23-01 to provide optional, temporary guidance for negative (disallowed) interest maintenance reserve.
• A risk-based capital factor for residual tranches reported on Schedule BA.

The NAIC exposed revisions to the following guidance:

• SSAP No. 21R to clarify that pledged assets must qualify as admitted invested assets for a collateral loan to be admissible.
• SSAP Nos. 43R and 48 to clarify the scope and reporting of residual interests and residual security tranches.
• Nullification of INT 03-02 because it is inconsistent with SSAP No. 25 for economic and non-economic related party transactions.
• INT 23-02 to provide guidance on how insurers will assess the corporate alternative minimum tax (CAMT) for the Q3 2023.
• INT 23-03 to provide guidance on assessing the effects of CAMT for periods on or after the 2023 year-end.
• A framework for the regulation of insurer’ investments.

The NAIC discussed the following guidance:

• Initial observations from filings submitted under Actuarial Guideline 53 adopted in 2022.
• Quantitative results of the economic scenario generator from the field test on C-3 Phase I requirements.
• Proposal to update the definition of an NAIC designation in the Purposes and Procedures Manual.
• Process for challenging the NAIC designations assigned through the filing exempt process when the Securities Valuation Office determines the Credit Rating Provider rating does not represent a reasonable assessment of risk for regulatory purposes.