Ohio IASA. Statutory Accounting Update. Adoptions. Ohio IASA November 23, 2015 Connie Jasper Woodroof StoneRiver, NAIC Liaison. StoneRiver, Inc.

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1 Statutory Accounting Update Ohio IASA November 23, 2015 Connie Jasper Woodroof StoneRiver, NAIC Liaison Proprietary 2015 StoneRiver, Inc. Agenda November Meeting Update Proprietary 2015 StoneRiver, Inc. StoneRiver, Inc. 1

2 Changes to AP&P Manual Shortening of SSAP titles Revisions and technical changes to make Manual more consistent Removing Issue Papers from printed copy of Manual Will be online and remain in CD-ROM version Preamble revisions Updated mission statement Clarification of materiality guidance Update hierarchy Numerous other revisions SSAP No. 1 Adopted GAAP requirement regarding disclosure of ability to remain on going concern Effective for 2016 reporting (mirrors GAAP) Early adoption allowed Blanks will have this year Related adoptions SSAPs No. 48, 68, 97 Affiliate holdings whose audited financials indicate substantial doubt as to ongoing concern ability must be nonadmitted No delayed effective date SSAP No. 11 Postemployment Benefits and Compensated Absences Removed defined benefit and defined contribution plans disclosure under this SSAP; disclosure moved to SSAP No. 92 and revised SSAP No. 23 Clarification of optional accounting treatment for Canadian insurance operations SSAP No. 24 Discontinued Operations and Extraordinary Items Formally adopted GAAP for extraordinary items and discontinued operations No accounting to statutory accounting; already in place StoneRiver, Inc. 2

3 Adopted SSAP Revisions SSAP No. 26 Clarifies yield-to-worst concept for amortization on callable bonds Differentiates between callable bonds, bonds with make whole provisions, callable bonds with a lockout period, callable bonds without a lockout period and callable bonds that do not have a stated call price SSAP No. 36 Troubled Debt Restructuring; SSAP No. 37 Mortgage Loans, and SSAP No. 40R Real Estate Investments Adopts modified GAAP accounting and reporting for foreclosed mortgage loans collateralized by real estate and foreclosed mortgage loans guaranteed by a government-sponsored program New Note disclosure SSAP No. 40R Real Estate Investments Encumbrance on wholly owned real estate held in wholly-owned LLC not considered risk-sharing SSAP No. 54 Individual and Group A&H Contracts Clarifies accounting and reporting for contracts subject to redetermination Language used in ACA Several statement language changes Added definition of and disclosure for charity care SSAP No. 55 Revisions specific to Title companies provision refers to the known claim reserve on Line 1, Liabilities page prior years refer to prior report years StoneRiver, Inc. 3

4 SSAP No. 61R Life, Deposit-Type and Accident & Health Reinsurance New statement disclosure requirements for XXX/AXXX reinsurance Annual statement supplement revised SSAP No. 62R P&C Reinsurance Revisions indicate paid/unpaid losses may be included in exception for retroactive reinsurance contracts on asbestos and environmental risks meeting specific criteria and receiving DOI approval SSAP No. 68 Business Combinations and Goodwill Goodwill limitation test is performed at individual reporting company level SSAP No. 69 Statement of Cash Flow Cash flow statement limited to transactions involving cash Ties to cash, cash equivalents, short-term investments Disclosure regarding inclusion of non-cash operating items SSAP No. 74 Protected Cell Revisions to references for statement reporting Adopted SSAP Revisions SSAP No. 97 Clarifies guidance regarding the application of equity methods SSAP No. 107 Address premium adjustments subject to redetermination StoneRiver, Inc. 4

5 with November Meeting Update Proprietary 2015 StoneRiver, Inc. Appendix F Policy Statement Revisions Disband Emerging Accounting Issues Working Group Incorporate new interpretation process by SAPWG Increase SAPWG membership by 2 states SSAP No. 1 All investment schedules to be included in Quarterly Statement Concept exposure to collect information regarding insurance-linked securities Insurers and reinsurers SSAP No Bonds and SSAP No. 43R Loanbacked and Structured Securities Would require AVR companies to value designation 5 bonds at lower of amortized cost or fair value Asks if same treatment should be considered for designation 4 bonds StoneRiver, Inc. 5

6 SSAP No. 26 Bonds BlackRock proposal for ETFs reported as bonds in Schedule D Part 1 Prepayment penalties changes Provides option for consideration Leave as is (investment income) Correct IMR instructions Realized gain not subject to IMR Realized gain subject to IMR SSAP No. 55 Clarify fees incurred for Salvage and Subrogation recoveries reported gross; regardless if fees aid to third party or processed internally SSAP No. 61R Variable annuity captive disclosure SSAP No. 65 High Deductible Policies New disclosure regarding receivables SSAP No. 97 Clarify accounting for non-insurance SCAs Add disclosure of permitted or prescribed practices of insurance SCAs Clarify adjustments for non-insurance SCAs passing activity test Add SCA filing process language from the Purposes and Procedures Manual of the NAIC Investment Analysis Office New disclosure providing regulators with information SCA valuation methods used and filing of SCA information with NAIC StoneRiver, Inc. 6

7 SSAP No. 107 Additional language regarding contracts where premium subject to redetermination Issue Paper 151 Surplus Notes Revises SSAP No. 41 Proposes revisions to valuation of surplus notes Concept exposures Requests comments on non-recourse charity notes accounting and reporting SSAP No. 78 Multi Peril Crop Insurance Collect information to update SSAP Use of billing date for 90-day overdue process Define processing date More specifics regarding period of risk for earning premiums Glossary of terms Seeking comments on GAAP disclosure for shortduration insurance contracts NAIC November National Meeting Update Proprietary 2015 StoneRiver, Inc. StoneRiver, Inc. 7

8 Questions? Please contact: Connie Jasper Woodroof x5761 StoneRiver, Inc. 8