Source: https://gaincompliance.com/ssap-and-blank-updates-to-the-statutory-financial-statements-june-24-2019-bwg-conference-call-part-1/
Timestamp: 2020-07-14 19:16:24
Document Index: 104499941

Matched Legal Cases: ['art 1', 'art 1', 'art 1', 'art 1', 'art 2', 'arts 3', 'art 1', 'art 1', 'arts 4', 'art 2', 'arts 1', 'art 1', 'arts 1', 'art 2', 'art 1']

SSAP and Blank Updates to the Statutory Financial Statements – June 24, 2019 BWG Conference Call (Part 1) | Gain Compliance
SSAP and Blank Updates to the Statutory Financial Statements – June 24, 2019 BWG Conference Call (Part 1)
The Blanks Working Group (“BWG”) held a conference call on June 24, 2019, to review and adopt the previously exposed positions outlined below as well as consider the exposure of two new items. In total, there were 16 adoptions, 2 new exposures, and one previous proposal that was not adopted. While a subsequent post will discuss Notes-related adoptions, this update will focus on adopted items excluding Notes-related adoptions.
Each of the items below were adopted as proposed or modified with friendly amendments, with no additional comments from the BWG, regulators, or other interested parties. All adoptions are applicable to Life/Fraternal, Property, Health, and Title blanks, unless otherwise specified (e.g., 2019-02BWG and 2019-16BWG Modified) and are effective for the 2019 Annual Statement (or Q1 2020 for applicable schedules).
2019-02BWG: This adoption clarifies the instructions to Part 1 of the VM-20 Reserves Supplement for consistency in reporting for due and deferred premium assets, updates the title under Part 1 to the title used in the blank, and adds clarifying information to the paragraph providing line instructions. (Life/Fraternal blank only)
2019-03BWG Modified: This modification adds an “NAIC Designation” column to the annual Schedule D, Part 2, Section 2 for use with mutual funds, with modification of the instructions to reflect the addition. The update also modifies the instructions for the NAIC Designation and Administrative Symbols columns for the quarterly Schedule D (Parts 3 and 4) to capture designations for mutual funds. Lastly, a friendly amendment was incorporated to change the verbiage of “zero-filled” to “left blank” for the instructions on Schedule D.
2019-04BWG Modified: This modification removes the reference to “life and fraternal only” in the General Instructions for Schedule BA regarding investments that have the underlying characteristics of bonds or fixed instruments.
The adoption also increases consistency in reporting investments for Schedule BA across statement types for investments in the categories “Fixed or Variable Interest Rate Investments that Have the Underlying Characteristics of a Bond, Mortgage Loan or Other Fixed Income Instrument” and “Joint Ventures or Partnership Interests for Which the Primary Underlying Investments are Considered to Be Fixed Income Instruments” to better distinguish those that have been reviewed and approved by the SVO and those that have not.
Lastly, this modification also includes the addition of a new question #35 on the General Interrogatories – Part 1 of the Annual Statement, which was a friendly amendment requested after exposure.
2019-06BWG: This adoption adds reference for structured settlements acquired by a reporting entity as an investment to the Schedule BA General Instructions in the “Any Other Class of Assets” definition to capture instances where the reporting entity has acquired the legal right to receive payments.
2019-09BWG: This adoption modifies the instructions for changes to SSAP No. 26R—Bonds and SSAP No. 43R—Loan-backed and Structured Securities being adopted by the SAPWG by adding reference to include mortgage reference securities in the “U.S. Special Revenue and Special Assessment Obligations and All Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions” category in the Investment Schedule General Instructions. This modification also modifies the bond characteristics definition for Schedule D, Part 1 and deletes Note 5.O — Structured Notes.
2019-10BWG: This adoption adds instructions for determining the gain (loss) reported in column 18 and the prepayment penalty and/or acceleration fee amount in column 20 on Schedule D, Parts 4 and 5 for called bonds where consideration received is less than par.
2019-12BWG: This modification updates the instructions for foreign open-end investment funds to be included as mutual funds in the Investment Schedules General Instructions and adds a code for foreign mutual funds to Schedule D, Part 2, Section 2, Column 3.
2019-13BWG: This adoption modifies the instructions for question 2 of the Supplemental Investment Risks Interrogatories to exclude diversified foreign mutual funds, and adds a requirement to report investments held in the 10 largest fund managers.
2019-14BWG Modified: This adoption modifies the instructions and illustrations for Note 8 – Derivatives to address the reporting changes necessary to implement SSAP No. 108, Derivatives Hedging Variable Annuity Guarantees, along with the addition of new categories for Variable Annuity Guarantees to the instructions for Schedule DB, Parts A and B, and new instructions for Schedule DB, Part E.
2019-15BWG: This adoption updates the instructions for the “Actual Cost” column for Schedule D (Parts 1, 3, 4 and 5) and Schedule DA to provide guidance when bonds are received as a property dividend or capital contribution.
2019-16BWG Modified: This modification allows yearly-renewable-term reinsurance business where mortality is the only risk covered to be reported separately in its own column on the Analysis of Operation by Lines of Business and the Analysis of Increase in Reserves for the Year, as the specific type of insurance product is not relevant for pure mortality risk. (Life/Fraternal blank only)
2019-17BWG Modified: This adoption adds two new lines for affiliated bank loans to the parent, subsidiaries and affiliates category to capture affiliated bank loans and modifies the existing lines for bank loans to reference unaffiliated bank loans on Schedules D (Part 1), DA, DL (Parts 1 and 2), and E (Part 2).
A friendly amendment was also adopted along with 2019-17BWG Modified to update the line descriptions for Schedule D, Pats 3, 4, and 5 (Line 8299999) to read “Unaffiliated Bank Loans”.
Disposed Item
2019-01BWG Modified: This item was intended to allow the viewer of the statements to better understand if the reporting entity relies on professional money management for their portfolio needs, which would have been supported by an additional question that was to be added to both the annual and quarterly General Interrogatories Part 1, among other clarifications. Contributors on the conference call were concerned that the proposal may lack regulatory benefit, and further, potentially require entities to disclose information determined to be confidential.
Lastly, the BWG exposed two items for public comment:
2019-18BWG: This exposure would add an NAIC Designation Modifier to the “NAIC Designation” column for Schedules D, DL and BA to accommodate the NAIC Designation Category granularity framework adopted by the Valuation of Securities (E) Task Force.
2019-19BWG: This exposure adds a new category line for unaffiliated certificates of deposit to Schedules D, DA, DL, and E, as well as a line to the Summary Investment Schedule for unaffiliated certificates of deposit. The revisions require modification of the list of bonds for Lines 8 through 11 of the Summary by Country as well as adding instruction to zero fill the CUSIP and ISIN fields for unaffiliated certificates of deposit.