Transcript Session 3.3 Accounting Update
Statutory Accounting Update
Ohio Chapter IASA
November 24, 2014 Connie Jasper Woodroof
StoneRiver, NAIC Liaison
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
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SSAP Changes for FHLB Transactions
• • • • •
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
• •
Preamble, Appendix D, Issue Paper 99
• AICPA SOPs no longer reviewed for statutory accounting; not considered authoritative accounting guidance
SSAPs No. 3 – Changes/Corrections & No. 68 – Business Combinations
• Merger footnote clarification • 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 Proprietary 2014 StoneRiver, Inc.
SSAP No. 16R – EDP Equip and Software
•
Capitalization policy from previous SSAP No. 87 was to be incorporated into No. 16R; was missed
• 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
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SSAP No. 19 – F&E; SSAP No. 22 - Leases
•
Service concession arrangements
• 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 Proprietary 2014 StoneRiver, Inc.
SSAP Nos. 23 and 43R
•
Structured Notes
• SSAP No. 23 • 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 • Language changes from structured “notes” to structured “securities” to conform to definition in
Purposes and Procedures Manual of the NAIC Securities Valuation Office
Proprietary 2014 StoneRiver, Inc.
SSAP No. 35R
•
Added balance disclosures for the three different types of risk provisions found in the Affordable Care Act (ACA)
• Quarterly and annual statements •
Exposed (March) additional roll forward disclosure for comment
•
In June exposed revisions to balance disclosures
• 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
• Will incorporate all of the above Proprietary 2014 StoneRiver, Inc.
• Hope to have done for year-end
SSAP No. 86 - Derivatives
•
Adopts ASU 2013-10
• Defines benchmark interest rate • 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
Proprietary 2014 StoneRiver, Inc.
SSAPs Nos. 92 and 102
•
Multiemployer Plans
• SSAP No. 92 • 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 • Same revisions as in SSAP 92 Proprietary 2014 StoneRiver, Inc.
SSAP No. 97 – Investments in Subs…….
• •
Incorporates changes to decision tree clarifying valuation method for downstream affiliates
• 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
•
Equity-based payments to non-employees
• Adopted in 2013, but effective December 31, 2014 • Adopts GAAP fair value with modifications • Nonadmit prepaid assets • • Disallows minimum value method Requires midpoint range to estimate Proprietary 2014 StoneRiver, Inc.
New SSAP No. 105
•
Working Capital Finance Investments
• 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 Proprietary 2014 StoneRiver, Inc.
New SSAP No. 106
•
Affordable Care Act Assessments
• Effective 1/1/2014 • • Moved language from SSAP No. 35R to new SSAP June amendment expanded disclosure required Proprietary 2014 StoneRiver, Inc.
Current Exposed Items
• •
Investment Classification Review
• Discussion topics and prioritization
Issue Paper 149
• 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 Proprietary 2014 StoneRiver, Inc.
Currently Exposed Items
• • •
SSAP No. 1 – Disclosure of Accounting Policies, Risk and Uncertainties, and Other Disclosures and SSAP No. 4 – Asset and Nonadmitted Assets
• Restricted assets clarification • Restricted assets does not mean nonadmitted assets
SSAP No. 41 – Surplus Notes
• Comments on revising thresholds
SSAP No. 54 – Individual and Group Accident & Health Contracts
• Medicare Advantage and Medicare Part D Risk Adjustment Premium Receivables and Payables Proprietary 2014 StoneRiver, Inc.
Currently Exposed Items
• • • • •
SSAP No. 55 – Unpaid Claims, Losses and LAE
• Extra contractual obligations & bad faith lawsuits
SSAP No. 56 – Separate Accounts
• Disclosure clarifications
SSAP No. 57 – Title Insurance
• New premium disclosure categories
SSAP No. 62R - Reinsurance
• Asbestos & Pollution Reinsurance Reporting Exception
SSAP No. 69 – Statement of Cash Flows
• Treatment of non-cash items in the Cash-Flow Statements Proprietary 2014 StoneRiver, Inc.
Exposed at August Meeting
• • •
SSAP No. 101 – Income Taxes
• Clarification of income tax footnote
SSAP No. 104R – Share-Based Payments
• Adopt ASU 2014-12
Appendix A
• Updates to allow the 2012 Group Long-Term Disability Table •
Appendix C
• Health Actuarial Guideline XLVII Proprietary 2014 StoneRiver, Inc.
Questions
•
Connie Jasper Woodroof
• NAIC Liaison • • • 800.373.3366 ext 85761 [email protected]
(until January) Proprietary 2014 StoneRiver, Inc.