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Date August 26, 2011
NAIC committees are still working to resolve a range issues,
despite cancellation of August meeting due to hurricane threat.
A National NAIC meeting was scheduled for next week, until Hurricane Irene made Philadelphia unsafe for humans. The meeting was canceled, but they still have important issues to address before year end. The next National meeting isn’t until November 3. In the meantime, some discussions are likely to move forward through conference calls and interim meetings. Here are just some of the hot topics that were on next week’s agenda. I’ll do my best to keep you informed of developments.
Solvency Modernization Initiative (SMI)
SMI activity did not take a vacation this summer. In May, the SMI Task Force released an update of the SMI “roadmap.” Several conference calls were held by the various NAIC groups supporting SMI. In July an interim meeting was held by the Corporate Governance Working Group (CGWG) to discuss various corporate governance issues; this was paired with an ERM (enterprise risk management) Symposium. The Symposium provided an educational opportunity for regulators and industry on corporate-wide risk management. The Symposium was held in anticipation of the NAIC developing guidelines for ORSA (own risk solvency assessment) for US insurers.
At the August meeting the SMI Task Force anticipates adopting comments for submission to the International Association of Insurance Supervisors (IAIS) on their Common Framework for the Supervision of Internationally Active Insurance Groups. Discussion by the CGWG on their draft White Paper on High-Level Corporate Governance Principles is expected to continue, while the Group Solvency Issues Working Group will move forward on their ORSA project.
Accounting Practices and Procedures Task Force (APPTF)
The groups under this Task Force produce a lot of activity all year long, with this summer being quite active. The Statutory Accounting Principles Working Group (SAPWG) has been diligently working this summer on the #1 statutory accounting hot topic of the year --- SSAP #101, Income Taxes – A Replacement of SSAP No. 10 and SSAP No. 10R. As most of you know, SSAP No. 10R’s expiration date is quickly approaching and a replacement is needed. Through a series of interim meetings and regularly held conference calls, SAPWG has a draft that they hope will not only be adopted by the Working Group, but also by the APPTF and the Financial Conditions (E) Committee. Of course, SSAP No. 101 is not the only item on the SAPWG agenda; several other accounting issues will also be addressed. During their hearing, 20 items are on the agenda, with 19 additional items on the regular meeting agenda. Of course there can always be last minute surprises.
With SAPWG being in the spotlight so much, the Emerging Accounting Issues Working Group’s (EAIWG) agenda has been very light. This meeting is no exception with only two items scheduled for discussion.
The bulk of the Blanks Working Group’s activity for year-end 2011 reporting was completed during a June 30th conference call. The August agenda has one item on it to be considered for 2012 reporting, the exposure of two new items for 2012, and the review of editorial changes suggested by the NAIC staff for 2011. Unless some surprises pop up under the “Other Matters” category, it looks to be a relatively short meeting.
Capital Adequacy Task Force (RBC)
For most of the RBC groups, it’s business as usual discussing possible future changes and considering new areas of direction for the various RBC formulas. The Task Force will hear reports from most of its working groups, as they usually do not meet at the NAIC National meetings. The Catastrophe Risk Subgroup, however, will be meeting to continue discussions to add a catastrophe risk calculation to the Property/Casualty RBC formula.
Reinsurance Task Force
This group plans to vote on proposed amendments to the Credit for Reinsurance Models as well as receive updates on the activities of the IAIS Subcommittee on Reinsurance and Other Forms of Risk Transfer.
Valuation of Securities Task Force (VOSTF)
VOSTF is scheduled to discuss amending the US government securities lists found in the Purpose and Procedures Manual. The Task Force is also considering removing RMBSs, CMBSs, and ABSs from regulatory review by adopting final, permanent instructions for their valuation and reporting. In a related discussion, the Task Force has been asked by various industry parties to reverse its decision with respect to the modified filing exempt (FE) rule for SSAP No. 43R securities. This would include the use of a pricing matrix. The Task Force also plans to hear updates on various ongoing projects including the recalibrating of NAIC designations.
This is a partial list of activities planned for the August NAIC National Meeting that was canceled. I’ll keep in touch with NAIC Focus subscribers as new information becomes available. In the meantime, Live long and prosper!
About Connie Jasper Woodroof
- Connie is a seasoned statutory accountant and educator who serves at the NAIC Liaison for StoneRiver. She regularly attends NAIC meetings to stay abreast of current and anticipated changes in regulatory reporting. Her long-range view and interpretation of the trends is invaluable to clients in applying new requirements and preparing for anticipated changes.
- Connie is active with IASA, having recently served two years as their VP of Education. She is a frequent guest speaker at IASA Chapter meetings, and she is a former IASA Volunteer of the Year.
- Prior to joining StoneRiver, Connie was the Financial Reporting Education Coordinator for the NAIC. She came to the NAIC with ten years of experience preparing annual statements in both the Life and P&C industries. Woodroof earned her bachelor's degree in accounting from Ball State University in Muncie, Indiana and holds the designation of FLMI, and a Masters Degree in General Psychology from the University of the Rockies, Colorado Springs, Colorado.
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