The Statutory Accounting Principles Working Group (SAPWG) is meeting virtually on August 26 as part of the NAIC 2021 Summer National Meeting. SAPWG will be discussing three current exposure drafts.

  • Proposed Bond Definition – SSAP No. 43R– SAPWG will discuss and review the proposed principles-based definitions of a bond that is eligible to be reported on schedule D part 1 as well as any comments received. The current working definition revolves around identifying a creditor relationship and whether the obligation qualifies as either an issuer credit obligation or an asset backed security. The exposure draft also includes additional discussion on what qualifies as an asset backed security.
  • Valuation of Foreign SCA – SSAP No. 97 – SAPWG will be reviewing comments on the exposure to limit negative equity valuation at zero for foreign insurance SCAs, specifically when not doing business on behalf of US Insurers. The SAPWG already adopted the adjustment to SSAP 97 limiting negative equity valuation to zero, but this accounts for some required adjustments for foreign SCAs that could have still resulted in a negative equity balance.
  • Clarification of Effective Call Price – SSAP No. 32R – SAPWG will review comments on exposed revisions that would clarify that the “effective call price” valuation limitation for preferred stock only applies if the call is currently exercisable or the issuer has announced it will be redeemed/called.