Session 3.3 Accounting Update

Report
Statutory Accounting Update
Ohio Chapter IASA
November 24, 2014
Connie Jasper Woodroof
StoneRiver, NAIC Liaison
Proprietary  2014 StoneRiver, Inc.
Proprietary  2014 StoneRiver, Inc.
Various Issue Papers
Add reference to original SSAP and current
authoritative guidance on face of each Issue Paper
Example:
Statutory Issue Paper No. 8 - Accounting for Pensions
Current Authoritative Guidance for Pensions: SSAP No. 102
This issue paper may not be directly related to the current
authoritative statement.
Original SSAP from Issue Paper: SSAP No. 8
Proprietary  2014 StoneRiver, Inc.
SSAP Changes for FHLB Transactions
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Associated SSAP changes: Nos. 1, 15, 30, 52
Establishes needed definitions including concept
that FHLB stock is considered a restricted asset
Disclosure as restricted asset in Note 5
Additional disclosures regarding type of FHLB
stock owned, redeemability of stock, and any
borrowed amounts in Note 11
Identification of individual securities involved in
any FHLB lending transaction as collateral
Proprietary  2014 StoneRiver, Inc.
Adopted Accounting Changes
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Preamble, Appendix D, Issue Paper 99
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AICPA SOPs no longer reviewed for statutory
accounting; not considered authoritative accounting
guidance
SSAPs No. 3 – Changes/Corrections & No. 68 –
Business Combinations
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Merger footnote clarification
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Mergers with shell company (reporting entity with no
outstanding liabilities) exempt from prior year
restatements
Mid-year mergers with shell company reflected as of
January 1 of current year
SSAP No. 16R – EDP Equip and Software
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Capitalization policy from previous SSAP No. 87
was to be incorporated into No. 16R; was missed
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Disclosure of capitalization policies was NOT limited to
audited financial statements only
Revisions clarify should be in both sets of
financials, making consistent with other SSAPs
Proprietary  2014 StoneRiver, Inc.
SSAP No. 19 – F&E; SSAP No. 22 - Leases
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Service concession arrangements
Proprietary  2014 StoneRiver, Inc.
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Not within the scope of SSAP No. 22
Not property, plant or equipment under SSAP No. 19
No interest from industry in developing accounting
guidance for these arrangements
SSAP Nos. 23 and 43R
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Structured Notes
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SSAP No. 23
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Requires identification of structured notes
Specifies not securities governed by SSAP No. 43R
References definition contained in the Purposes and
Procedures Manual of the NAIC Securities Valuation Office
SSAP No. 43R
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Language changes from structured “notes” to structured
“securities” to conform to definition in Purposes and
Procedures Manual of the NAIC Securities Valuation Office
SSAP No. 35R
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Added balance disclosures for the three different
types of risk provisions found in the Affordable
Care Act (ACA)
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Quarterly and annual statements
Exposed (March) additional roll forward disclosure
for comment
In June exposed revisions to balance disclosures
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If write A&H business but does not have anything to
report, must zero-fill table, not mark as None, and
provide reason for zero balances
New SSAP being developed
Proprietary  2014 StoneRiver, Inc.
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Will incorporate all of the above
Hope to have done for year-end
SSAP No. 86 - Derivatives
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Adopts ASU 2013-10
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Defines benchmark interest rate
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Eliminates the prior restriction for using different
benchmark rates for similar hedges
• Including Fed Funds Effective Swap Rate (i.e.,
Overnight Index Swap Rate)
Reconciliation of DB to balance sheet
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SSAPs Nos. 92 and 102
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Multiemployer Plans
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SSAP No. 92
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Proprietary  2014 StoneRiver, Inc.
Adopts by reference ASC 715-80 as detailed in ASU
2011-09 with limited disclosures
Current disclosure updated to indicate if current
contributions are more than 5% of total contributions to
the plan
Additional disclosure regarding rehabilitation plans,
surcharges paid, minimum future contributions, future
obligations
SSAP No. 102
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Same revisions as in SSAP 92
SSAP No. 97 – Investments in Subs…….
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Incorporates changes to decision tree clarifying
valuation method for downstream affiliates
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Does not change current accounting
Modifies Appendix B (Valuation Method flowchart)
to reference accounting for downstream holding
companies
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SSAP No. 104R – Share-Based Payments
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Equity-based payments to non-employees
Proprietary  2014 StoneRiver, Inc.
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Adopted in 2013, but effective December 31, 2014
Adopts GAAP fair value with modifications
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Nonadmit prepaid assets
Disallows minimum value method
Requires midpoint range to estimate
New SSAP No. 105
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Working Capital Finance Investments
Proprietary  2014 StoneRiver, Inc.
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Effective 1/1/2014
Admitted assets if meet guidelines of SSAP
Disclosure in Note #5
Must have SVO approval
Although short-term investment, required to be
reported on Schedule BA
New SSAP No. 106
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Affordable Care Act Assessments
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Effective 1/1/2014
Moved language from SSAP No. 35R to new SSAP
June amendment expanded disclosure required
Current Exposed Items
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Investment Classification Review
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Discussion topics and prioritization
Issue Paper 149
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Revisions to SSAP No. 40 – Real Estate and SSAP
No. 48 – Joint Ventures, Partnerships & Limited
Liability Companies
Wholly-Owned Single Real Estate Property in an LLC
Currently Exposed Items
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SSAP No. 1 – Disclosure of Accounting Policies,
Risk and Uncertainties, and Other Disclosures and
SSAP No. 4 – Asset and Nonadmitted Assets
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Restricted assets clarification
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Restricted assets does not mean nonadmitted assets
SSAP No. 41 – Surplus Notes
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Comments on revising thresholds
SSAP No. 54 – Individual and Group Accident &
Health Contracts
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Medicare Advantage and Medicare Part D Risk
Adjustment Premium Receivables and Payables
Currently Exposed Items
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SSAP No. 55 – Unpaid Claims, Losses and LAE
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Extra contractual obligations & bad faith lawsuits
SSAP No. 56 – Separate Accounts
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Disclosure clarifications
SSAP No. 57 – Title Insurance
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New premium disclosure categories
SSAP No. 62R - Reinsurance
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Asbestos & Pollution Reinsurance Reporting Exception
SSAP No. 69 – Statement of Cash Flows
Proprietary  2014 StoneRiver, Inc.
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Treatment of non-cash items in the Cash-Flow
Statements
Exposed at August Meeting
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SSAP No. 101 – Income Taxes
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Clarification of income tax footnote
SSAP No. 104R – Share-Based Payments
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Adopt ASU 2014-12
Appendix A
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Updates to allow the 2012 Group Long-Term Disability
Table
Appendix C
Proprietary  2014 StoneRiver, Inc.
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Health Actuarial Guideline XLVII
Questions
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Connie Jasper Woodroof
Proprietary  2014 StoneRiver, Inc.
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NAIC Liaison
800.373.3366 ext 85761
[email protected] (until January)
[email protected]

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