Annual Statement & SSAP Update 2018 PAMIC Financial Management Seminar

Transcription

1 Annual Statement & SSAP Update 2018 PAMIC Financial Management Seminar Presented by: Scott Esworthy, CPA, Principal September 6, 2018 Hershey Country Club

2 Annual Statement and SSAP Update December 31, 2018 Complete lists of adopted and exposed information can be accessed through the following links: Summary Report from the recent 8/4/18 NAIC SSAP WG meeting Only nonsubstantive revisions were Adopted: IN Additional elements Under the ax Cuts & Jobs Act were adopted, which included how address Alternative Minimum ax Credits Substantive revisions to statutory were Exposed: Ref # SSAP No. 22R Leases rejects the GAAP guidance, but proposes revisions to incorporate portions of the ASU, while retaining the operating lease concept for statutory accounting Ref #32 SSAP No. 30R Common Stocks revised to improve definition and included closed-end funds and unit-investment trusts within the scope of the definition. Nonsubstantive revisions (15) were Exposed: Ref # SSAP No. 41R Surplus Notes clarification of situations when an issued surplus note would be actually reported as debt. Ref # SSAP No. 48 Joint Ventures, Partnerships and Limited Liability Companies add disclosures when an entity s share of losses results in negative equity position. Ref # SSAP No. 68 Business combinations and Goodwill clarify when ownership of SCA is cancelled, due to statutory merger reporting Ref # SSAP No. 97 Investments in SCA clarify existing reporting when an SCA is in a loss position. Updates to the March, 2018 APP Manual Obtained from logging into the NAIC Account Manager on the NAIC website Only nonsubstantive revisions were Adopted: Ref # 18 SSAP No. 68 Business Combinations & Goodwill enhanced disclosures Ref # 30 SSAP No. 92, 102 Pensions revisions to remove the level 3 fair value reconciliation disclosure Ref # 37 Revenue Recognition ASUs statutory accounting rejected the GAAP revenue recognition accounting for contracts with customers Ref # SSAP No. 101 Federal income taxes - revisions to disclosure wording and Q&A language Ref # SSAP No. 97 SCA investments additional disclosures related to SCA s with losses and reporting entity s share of negative equity

3 NAIC Blanks working Group adopted modifications for 12/31/18 and 2019 Quarters Annual Statement updates 12/31/18 o o o New Schedule F New General Interrogatory merger questions New disclosure to Note 10, regarding SCA 2019 Statements o Nothing significant Highlights of the New Schedule F Similar to prior year s Schedule F, but now reorganized and combines prior parts 3,4,5,6,7 & 8 and puts into a single Part 3 Part 3 can no longer aggregate any recoverable amounts under $100,000 Disputed amounts now a column versus a footnote Ceded reinsurance credit risk columns calculations now in Sch F, versus previously only calculated in RBC Provision for Certified Reinsurance (columns 54-69) same instructions Schedule F, Part 4 Letters of credit, previously a footnote (same reporting instructions) Schedule F, Part 5 five largest provisional commissions and recoverables, previously a footnote (same reporting instructions)

4 NAIC Statutory Accounting Principle Working Group Meeting Summary Report 8/4/18

5 2018 Summer National Meeting Boston, Massachusetts SAUORY ACCOUNING PRINCIPLES (E) WORKING GROUP Saturday, August 4, :000 11:30 a.m. Meeting Summary Report he Statutory Accounting Principles (E) Working Group met Aug. 4, During this meeting, the Working Group: 1. Adopted its May 24 minutes, which included adoption of eight nonsubstantive agenda items and exposure of four substantive and nine nonsubstantive agenda items. (Detail of agendaa items adoptedd May 24 begins on Page 3.) 2. Adopted the following nonsubstantive revisions to statutory accounting guidance: a. Statement of Statutory Accounting Principle (SSAP) No. 1 Accounting Policies, Risks & Uncertainties, and Other Disclosures and Appendix A-001 Investments of Reporting Entities: Revisions align the reporting schedule lines to the investment schedules, allowing for cross-checks and lesss manual allocations to develop with a Jan. 1, 2019 effective date. With adoption, the related Blanks (E) Working Group proposall will be updated. (Ref # ) b. SSAP No. 21 Other Admitted Assets: Revisions, as modified during the meeting, restrict the guidance when a reporting entity is the owner and beneficiary of a life insurance contract to require that the life insurance policy be in compliance with Internal Revenue Code 7702 and to require disclosures of the underlying investment vehicles. he Working Group agreed not to incorporate language to address products that are not compliant with 7702 (including variable annuities), noting that under SSAP No. 4 Assetss and Nonadmitted Assets,, these items would be nonadmitted. If further consideration is preferred, industry should submit a proposal. (Ref # ) c. SSAP No. 49 Policy Loans and SSAP No. 56 Separate Accounts: Revisions clarify the reporting of policy loans, and specify that policy loans that originate from separate account policies must be funded to the general account in order for the policy loan to be admitted. A Blanks (E) Working Group proposal will request removal of the contract loan line from the Separate Account blank. (Ref #35) d. Interpretation (IN) Accounting for Revenues Under Medicare Part D Coverage: Revisions provide guidance that the Coverage Gap Discount Program payments are reported as uninsured plans. (Ref # ) e. IN Additional Elements Under the ax Cuts and Jobss Act: Adoptedd IN to address the Repatriation ransition ax (R), the Alternative Minimumm ax (AM) Credit, and thee Global Intangible Low-axed Income (GILI) ax from the ax Cuts and Jobs Act with revisions discussed during the meeting. (Ref # ) 3. Exposed the following substantive revisions to statutory accounting guidance: a. SSAP No. 22R Leases: Exposed a proposed issue paper and substantively revised SSAP No. 22R in response to Accounting Standards Update (ASU) , Leases. Although the proposed statutory accounting revisions reject the U..S. generally accepted accounting principles (GAAP) guidance for operating leases, the revisions incorporate various aspects from the ASU and clarify provisions for lease accounting. (Ref # ) b. SSAP No. 30R Unaffiliated Common Stock: Exposed a proposed issue paper and substantively revised SSAP No. 30R to improve the common stock definition and includee closed-end funds and unit-investment of Securities (E) ask Force, the trusts within scope. With this action, the Working Group directed referralss to the Valuation Capital Adequacy (E) ask Force and the Blanks (E) Working Group identifying support for incorporating a column on Schedule D-2-2 for reporting NAIC designations for equity investmentss that can be reviewed and assigned a designation by the Securities Valuation Office (SVO). (Ref #32) c. SSAP No. 62R Property and Casualty Reinsurance: Revisions incorporate guidance from EIF 93-6, Accounting for Multiple-Year Retrospectively Rated Contracts by Cedingg and Assuming Enterprisess and from EIF D-035, FASB Staff Views on Issue No (Ref #28) 2018 National Association of Insurance Commissioners s 1

6 d. New SSAP/Issue Paper Special Accounting reatment for Limited Derivatives Hedging Variable Annuity Guarantees: Exposed a proposed issue paper and draft SSAP to prescribe specific accounting and reporting guidance for derivatives that hedge interest rate risk of variable annuity guarantees. (Ref # ) 4. Exposed the following nonsubstantive revisions to statutory accounting guidance: a. SSAP No. 2R Cash, Cash Equivalents, Drafts and Short-erm Investments, SSAP No. 26R Bonds, SSAP No. 43R Loan-Backed and Structured Securities, and SSAP No. 86 Derivatives: Revisions indicate that structured notes, except for mortgage-referenced securities, for which the contractual principal amount to be paid at maturity or the original investment amount is at risk for other than failure of the borrower to pay the contractual amount due, shall be reported as derivatives within the scope of SSAP No. 86. he revisions note that mortgage-referenced securities will be in scope of SSAP No. 43R. (Ref # ) b. SSAP No. 4: Revisions identify that items reported as invested assets acquired as part of regulatory transactions as defined in the Purposes and Procedures Manual of the NAIC Investment Analysis Office (P&P Manual), that meet the definition of an asset, shall only be admitted with approval of the domestic state insurance department as a permitted or prescribed practice. (Ref # ) c. SSAP No. 15 Debt and Holding Company Obligation and SSAP No. 25 Affiliates and Other Related Parties: Revisions reference existing guidance in other SSAPs for proper accounting treatment when there has been a forgiveness of an amount owed. (Ref # ) d. SSAP No. 21: Revisions propose accounting and reporting guidance for structured settlement income streams acquired by insurers as investments. Comments on whether this issue should be considered substantive, rather than nonsubstantive, were requested during the exposure period. (Ref # ) e. SSAP No. 22 Leases: Revisions reject ASU , Leases Land Easement Practical Expedient for ransition to opic 842. (Ref # ) f. SSAP No. 37 Mortgage Loans: Revisions clarify that a mortgage loan acquired through a mortgage loan participation agreement is limited to a single mortgage loan agreement with a sole borrower. (Ref # ) g. SSAP No. 41R Surplus Notes: Revisions intend to prevent situations in which an issued surplus note can be linked to a reported asset or agreement and still qualify for surplus note reporting. Rather, if a surplus note is linked to a reported asset or agreement that results with the surplus note not meeting the subordinate requirements or that circumvents the insurance commissioner s control, it shall be reported as debt. (Ref # ) h. SSAP No. 43R: Revisions concurrently exposed with the Valuation of Securities (E) ask Force, eliminate the modified filing exempt process in determining the NAIC designation. With the exposure, notification was directed to the Blanks (E) Working Group to allow concurrent consideration of the impact to the Annual Statement reporting instructions. (Ref # ) i. SSAP No. 48 Joint Ventures, Partnerships and Limited Liability Companies: Revisions add disclosures to capture information for when an entity s share of losses results in a negative equity position. (Ref # ) j. SSAP No. 51 Life Contracts, SSAP No. 52 Deposit-ype Contracts and SSAP No. 61R Life, Deposit-ype and Accident and Health Reinsurance: Revisions add life liquidity disclosures and expand the variable annuity liquidity disclosures for year-end (Ref # ) e. SSAP No. 61R and Appendix A-791 Life and Health Reinsurance Agreements: Revisions propose disclosures, with comments requested regarding whether the proposed disclosures adequately address the Financial Analysis (E) Working Group referral. In addition, proposed revisions update the question-and-answer guidance to clarify the applicability of A-791. (Ref #28) k. SSAP No. 68 Business Combinations and Goodwill: Revisions clarify that scenarios in which the ownership (stock) of a subsidiary, controlled or affiliated (SCA) is cancelled, with the parent entity directly reporting the SCA assets and liabilities on their financial statements, should be considered statutory mergers. (Ref # ) 2018 National Association of Insurance Commissioners 2

7 l. SSAP No. 72 Surplus and Quasi-Reorganizations: Revisions incorporate accounting guidance for when a reporting entity provides a distribution that represents a return of capital. (Ref # ) m. SSAP No. 97 Investments in Subsidiary, Controlled and Affiliated Entities: Revisions clarify the existing reporting requirements when an SCA is in a loss position. (Ref # ) n. Appendix A-820 Minimum Life and Annuity Reserve Standards Revisions remove the phrase good and sufficient reserve as it is not consistent with the related NAIC Standard Valuation Law Model 820. (Ref # ) 5. Exposed the following editorial revisions to statutory accounting (Ref # EP): a. SSAP No. 86: Removes the reference to the 2017 effective date. b. SSAP No. 97: Revisions remove old paragraph numbers, which are not applicable in the current SSAP. c. Appendix A-010 Minimum Reserve Standards for Individual and Group Health Insurance Contracts: Revisions update a paragraph reference and an incorrect date to be consistent with Model # Deferred discussion on the following projects: a. Reporting NAIC Designations as Weighted Averages under SSAP No. 43R: Deferred discussion until agenda item on the modified filing exempt designation approach has been addressed. (Ref # ) b. Bank Loan Referral from Valuation of Securities (E) ask Force: Deferred discussion and directed NAIC staff to conduct further analysis on borrowing base loans and debtor-in-possession financing. (Ref # ) c. Discussed provisions from ASU 12, Derivatives and Hedging, noting the intent to consider the documentation revisions as a nonsubstantive change in the interim, with a separate agenda item to consider potential substantive revisions to the accounting and reporting of derivatives. (Ref #33) 7. Received an update on the following projects and referrals: a. Received information on the Financial Accounting Standards Board s (FASB) discussion of the Long-erm Insurance Contracts project. NAIC staff will review this ASU immediately after issuance. b. Received an update on agenda item for credit losses, noting plans for NAIC staff to work with industry before subsequent Working Group discussion. (Ref # ) c. Received an update on the Vital Source/BookShelf Product, which will be used as the electronic source of the Accounting Practices and Procedures Manual (AP&P Manual) beginning in d. Received an update that as part of Valuation Manual coordination efforts that NAIC staff and / or members of Life Actuarial (A) ask Force expect to undertake a project regarding consistency between Appendix A Excerpts of Models Laws and related model laws. e. Received an update on current U.S. GAAP exposures, noting that no comments by the Working Group are planned. f. Received information on articles that incorrectly referenced the changes adopted to SSAP No. 26R in he discussion reiterated that the 2017 revisions focused on the measurement of exchange-traded funds (EFs) captured in scope of SSAP No. 26R, and did not modify the extent to which EFs were captured in SSAP No. 26R. 8. May 24 Conference Call Detail of Agenda Items Adopted: a. SSAP No. 1 and SSAP No. 32 Preferred Stock: Revisions reflect the revised reporting approach and remove duplicative language. (Ref # ) b. SSAP No. 5R Liabilities, Contingencies and Impairments of Assets, SSAP No. 41R, SSAP No. 52, and SSAP No. 62R: Revisions reflect editorial revisions to SSAP Nos. 5R, 41R, 52 and 62R. (Ref # EP) 2018 National Association of Insurance Commissioners 3

8 c. SSAP No. 26R, SSAP No. 30, SSAP No. 32, SSAP No. 43R, SSAP No. 86, SSAP No. 100R: Revisions reject ASU , Recognition and Measurement of Financial Assets and Financial Liabilities. (Ref # ) d. SSAP No. 56: Revisions incorporate separate account disclosure of non-u.s. Securities and Exchange Commission (SEC) registered products issued by insurers initially in the year-end 2018 financial statements. (Ref # ) e. SSAP No. 97: Revisions incorporate disclosures when a reporting entity s share of losses in an SCA exceed its investment in the SCA. (Ref # ) f. SSAP No. 101 Income axes: Revisions reflect changes in response to the ax Cuts and Jobs Act including the addition of footnotes and explicit reporting guidance. (Ref # ) g. Appendix D Nonapplicable GAAP Pronouncements: Revisions reject ASU 15, Codification Improvements to opic 995, U.S. Steamship Entities: Elimination of opic 995 as not applicable. (Ref # ) h. Appendix B Interpretations of Statutory Accounting Principles and Appendix H Superseded Statements : Revisions provide guidance for the 2019 moratorium and future moratoriums for the federal Affordable Care Act Section 9010 fee in IN ACA Section 9010 Assessment Moratoriums and update IN ACA Section 9010 Assessment 2017 Moratorium to remove reference to fee accruals payable in 2019 with approved nullification of IN at year-end (Ref # ) 9. he comment deadline for new and other exposed items is Oct. 5, W:\DAA\National Meetings\2018\Summer\Summaries\Final Summaries\SAPWG.docx 2018 National Association of Insurance Commissioners 4

9 Updates to the March, 2018 APP Manual

10 SSAP / Appendix Document Sub / Non itle Description Effective Date Date Adopted SSAP No _FormA.pdf Nonsubstantive Impact of Future Settled Premiums on Option Valuations Appendix D _Form_A.pdf Nonsubstantive ASU , Master rust Reporting SSAP No _Form_A.pdf Nonsubstantive Goodwill Limitation in SSAP No. 68 and SSAP No. 97 SSAP Nos. 41, _Form_A.pdf Nonsubstantive Double Counting of Surplus Notes Updates to the Presentation and Disclosure of SSAP Nos. 92, _Form_A.pdf Nonsubstantive Pension and Postretirement Revisions require individual disclosures for derivatives with financing premiums in Schedule DB. hese individual disclosures, and the aggregate disclosures adopted in November 2017 (required in a narrative disclosure for yearend 2017), will be data captured in the year end 2018 financial statements. 12/31/2018 3/24/2018 Rejects ASU as not applicable to statutory accounting. 3/24/2018 3/24/2018 Revisions capture additional goodwill information in SSAP No. 68 and Note 3 Business Combinations and Goodwill for yearend 2018 reporting. 12/31/2018 3/24/2018 Revisions clarify the existing concept that restricts the double counting of surplus notes to explicitly state that surplus notes issued by the parent and held by the SCA shall be eliminated in the SCA s value reported by the parent insurance company. 3/24/2018 3/24/2018 Revisions remove the Level 3 fair value reconciliation disclosure. 3/24/2018 3/24/2018 SSAP No. 103R _Form_A.pdf Nonsubstantive Wash Sale Disclosure SSAP Nos. 49, 56* _Form_A.pdf Nonsubstantive Policy Loans Appendix B and H _Form_A.pdf Nonsubstantive IN Updates Revisions exclude cash equivalents, derivatives and short term investments with credit assessments equivalent to an NAIC 1 or NAIC 2 designation from the wash sale disclosure and clarify that the wash sale disclosure is required in the period in which the security is sold. 3/24/2018 3/24/2018 Revisions state that policy loans that originate from separate account policies must be "funded" to the general account in order for the policy loan to be admitted. 8/4/2018 8/4/2018 Revisions update IN 02 22: Accounting for U.S. errorism Risk Insurance Program and IN 09 08: Accounting for Loans Received Under the Federal ALF Program, and nullify IN /24/2018 3/24/2018 Revisions reject the following ASUs for statutory accounting: 1) ASU , Revenue from Contracts with Customers 2) ASU , Revenue from Contracts with Customers, Deferral of the Effective Date 3) ASU , Revenue from Contracts with Customers, Principal versus Agent Considerations 4) ASU , Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing SSAP No _ _Form_A.pdf Nonsubstantive Revenue Recognition ASUs 5) ASU , Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients 3/24/2018 3/24/2018 SSAP No _Form_A.pdf Nonsubstantive Federal Income ax Reform Revisions adopted in response to the ax Cuts and Jobs Act. 5/24/2018 5/24/2018 Appendix B IN _Form_A_IN_18 01.pdf Nonsubstantive Updated ax Estimates Under the ax Cuts and Jobs Act Provides a limited scope, limited time interpretation in response to the ax Cuts and Jobs Act. 12/31/2017 2/8/2018 SSAP Nos. 1, _Form_A.pdf Nonsubstantive VOSF / Blanks Symbol Changes Revisions reflect the updated reporting symbols / process of the VOSF and remove duplicative language. 12/31/2018 5/24/2018 SSAP No. 21* _Form_A summer.pdf Nonsubstantive Private Placement Variable Annuities Revisions restrict the guidance when the reporting entity is the owner and beneficiary of a life insurance contract to require that the life insurance policy be in compliance with Internal Revenue Code (IRC) 7702 and to require disclosures of the underlying investment vehicles. 8/4/2018 8/4/2018 SSAP No _Form_A.pdf Nonsubstantive Private Placement Variable Annuities Disclosure of non SEC registered products issued by insurers initially in the year end 2018 financial statements. 12/31/2018 5/24/2018 SSAP No _Form_A.pdf Nonsubstantive SCA Loss racking Revisions incorporate additional disclosures to SSAP No. 97 to track an SCA s losses. 12/31/2018 5/24/2018 Revisions provide guidance for the 2019 moratorium and future moratoriums for the federal Affordable Care Act Section 9010 fee in IN and updates with a December 31, IN A_IN_18 02.pdf Nonsubstantive 2019 ACA Section 9010 Assessment Moratorium 2018 nullification of IN /24/2018 5/24/2018 Revisions provide guidance for the 2019 moratorium and future moratoriums for the federal Affordable Care Act Section 9010 fee in IN and updates with a December 31, IN B_IN_16 01.pdf Nonsubstantive 2019 ACA Section 9010 Assessment Moratorium 2018 nullification of IN /24/2018 5/24/2018 Appendix H _Form_A.pdf Nonsubstantive 2019 ACA Section 9010 Assessment Moratorium Revisions provide guidance for the 2019 moratorium and future moratoriums for the federal Affordable Care Act Section 9010 fee in IN and updates with a December 31, 2018 nullification of IN /24/2018 5/24/2018 Appendix D _Form_A.pdf Nonsubstantive ASU , U.S. Steamship Entities, Elimination of opic 995 Revisions reject ASU as not applicable to statutory accounting. 5/24/2018 5/24/2018

11 SSAP Nos. 26R,30, 32, 43R, 86, 100R _Form_A.pdf Nonsubstantive ASU , Recognition and Measurement of Financial Assets and Financial Liabilities Revisions reject ASU for statutory accounting. 5/24/2018 5/24/2018 SSAP Nos. 5R, 41R, EP_Form_A.pdf Nonsubstantive NAIC Accounting Practices and Procedures Manual Edition and Maintenance Update Revisions update editorial revisions to SSAP Nos. 5R, 41R, 52, and 62R. 5/24/2018 5/24/2018 Appendix B IN 05 05* _Form_A_IN_05 05.pdf Nonsubstantive Update Medicare Part D Definitions Appendix B IN 18 03* _Form_A_IN_18 03.pdf Nonsubstantive Additional Elements Under the Federal ax Cuts and Jobs Act SSAP No. 1, Appendix A 001* _Form_A.pdf Nonsubstantive Summary Investment Schedule Updates Appendix C AG_42a.pdf Nonsubstantive Actuarial Guideline XLII, he Application of the Model Regulation Permitting the Recognition of Preferred Mortality ables for Use in Determining Minimum Reserve Liabilities Revisions add a description of the Coverage Gap Discount Program, amend existing guidance on program payments and update definitions. 8/4/2018 8/4/2018 Revisions provide statutory accounting and reporting guidance for the repatriation transition tax (R), Alternative Minimum ax (AM) Credit, and the Global Intangible Low axed Income (GILI) ax. 8/4/2018 8/4/2018 Revisions align the summary investment schedule more closely to the underlying investment schedules, allowing for cross checks and less manual allocations. 1/1/2019 8/4/2018 Revisions to AG 42 adopted by the Life Actuarial (A) ask Force on December 4, 2017, and adopted by the Life Insurance and Annuities (A) Committee on March 25, /25/ Interim Mtg Combined_ _ _Adoptions.pdf Combined Interim Mtg Combined_ _Adoptions.pdf Combined Spring NM Combined_ _Adoptions.pdf Combined Summer NM Combined_ _Adoptions.pdf Combined Adopted Items Following the May 24, 2018 Interim Meeting Adopted Items Following the February 8, 2018, Interim Meeting Adopted Items Following 2018 Spring National Meeting Adopted Items Following the 2018 Summer National Meeting On May 24, 2018, the Statutory Accounting Principles (E) Working Group adopted revisions to the As of March 2018 Accounting Practices & Procedures Manual. Agenda items associated with these revisions have been combined into this single PDF. 5/24/2018 On February 8, 2018, the Statutory Accounting Principles (E) Working Group adopted revisions to the As of March 2018 Accounting Practices & Procedures Manual. Agenda items associated with these revisions have been combined into this single PDF. 2/8/2018 On March 24, 2018, the Statutory Accounting Principles (E) Working Group adopted revisions to the As of March 2018 Accounting Practices & Procedures Manual. Agenda items associated with these revisions have been combined into this single PDF. 3/24/2018 On August 4, 2018, the Statutory Accounting Principles (E) Working Group adopted revisions to the As of March 2018 Accounting Practices & Procedures Manual. Agenda items associated with these revisions have been combined into this single PDF. 8/4/2018

12 NAIC Blanks Working Group Adopted Modifications to Financial Statements and Instructions

13 Blanks (E) Working Group: Adopted Modifications Page 1 of 13 8/22/2018 ABOU HELP mynaic Blanks (E) Working Group Adopted Modifications to Financial Statements and Instructions Last Updated August 4, 2018 his listing does not include adopted proposals for annual and quarterly statements for the year 2016 and prior. Statement ype: F = Fraternal; H = Health; L = Life; L/F = Life/Fraternal; P/C = Property/Casualty; SA = Separate Accounts; = itle Ref No. Effective Date Description Date Adopted Statement ype Filing ype BWG 1st Quarter 2017 Add new disclosure to Note 5 for short sales. he illustration in the disclosure will be data captured. Add a new code (SS) to the code list in the Investment Schedules General Instructions for short sales. Add additional instructions related to short sales to Schedule D (Part 1; Part 2, Section 1; Part 2, Section 2), Schedule DA, Part 1; and Schedule E, Part 2. 6/16/ BWG 1st Quarter 2017 It is requested that an additional letter code (D) and a code description be added to the Explanation of basis of allocation of premiums by states, etc. section for use on Schedule -Exhibit of Premiums Written Allocated by States and erritories. he change would apply to both the and Annual Statement Blanks and referenced in the and Annual Statement Instructions. 8/9/2016 P/C

14 Blanks (E) Working Group: Adopted Modifications Page 2 of 13 8/22/ BWG 1st Quarter 2017 Insert the following phrase to the Column 1 Description instructions for Schedule DB Part A Section 1: 8/9/2016 For swaptions, include the hedge ID number, the tenor (i.e. time from effective date to maturity date), and the start and end dates of the underlying swap BWG BWG BWG BWG 1st Quarter 2017 (Note 5) Annual 2018 (Schedule D Verification, Part 4 and Part 5) Annual 2017 Annual 2017 Annual 2017 Add disclosure to Note 5 for prepayment penalties and acceleration of fees for callable securities which will be data captured. Also additional instructions being added to Columns 18 and 20 of Schedule D, Parts 4 and 5 for reporting prepayment penalties and acceleration of fees for these securities. Add new supplement for reporting VM-20 reserves. Add new line to Analysis of Increase in Reserves During the Year related to VM-20 deterministic/stochastic reserves. Modify the instructions for Exhibit 5 to reflect valuation under VM-20. Add lines to the Five-Year Historical related to VM-20 deterministic/stochastic reserves. Add the VM-20 Reserve Supplement to the Supplemental Exhibits and Schedules Interrogatories. Delete the General Interrogatory, Part 2 Questions 9.1 and 9.2 (24.1 and 24.2 if Fraternal) regarding variable annuities with guarantees and renumber the remaining interrogatory questions. Replace interrogatory with a variable annuities supplement. Add a question to the Supplemental Exhibits and Schedules Interrogatories for the supplement. Remove Line 2.2 from the Separate Accounts General Interrogatories. Add new interrogatory question to the annual and quarterly general interrogatories regarding selfdesignated 5*GI securities. 8/9/ /15/2016 L, F, SA Annual 12/15/2016 L, F, H, SA 12/15/2016 Annual /08/2017

15 Blanks (E) Working Group: Adopted Modifications Page 3 of 13 8/22/ BWG BWG BWG BWG BWG BWG 01BWG Annual 2017 Annual 2017 Annual 2017 Annual 2017 Annual 2017 Add instructions for the life insurance policy locator contact to Jurat electronic only section. Property and itle are included because the Jurat page and instructions are uniform or all statement types. Modify instructions for Long-erm Care Insurance Experience Reporting Form 5 to indicate a Grand otal page should be filed. Add crosschecks to Columns 1, 2 and 3 to Form 2, Part C and Form 3. Reduce the number of collateral type categories from 21 to 10 on the Schedule D, Part 1 and to also add more explanations and examples to the categories. Split the Cybersecurity and Identity heft Insurance Coverage Supplement blank into three parts (interrogatories, stand-alone policies and packaged policies). Add interrogatory questions to better indicate if a company writes certain types of cybersecurity and identity theft business. Clarify in the instructions who should be completing the supplement. Add information on claims open, closed with payment and closed without payment. Modify the appropriate instructions and blank pages to reflect the movement of money market mutual funds from being reported on Schedule DA, Part 1 to being reported on Schedule E, Part 2. Change the title for Schedule E Verification to include the reference to Part 2 and add a column to the annual verification for money market mutual funds. Modify the illustration for Note 12A (3) - Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans (Defined Benefit Plan). Annual 2017 Delete the Health Property Supplement instructions and blank pages. Update the Supplemental 04/08/2017 L, P/C, F, H Annual 04/08/2017 Annual 04/08/2017 P/C Annual 04/08/ /08/2017, SA Annual 06/14/2017 H Annual

16 Blanks (E) Working Group: Adopted Modifications Page 4 of 13 8/22/2018 Exhibits and Schedules Interrogatories to reflect the deletion. 02BWG 03BWG 04BWG 05BWG 06BWG 08BWG Annual 2017 Annual 2017 Annual 2017 Annual 2017 Annual 2017 Annual 2017 For Column 34, Capital Structure Code on Schedule D, Part 1, replace the description of Other for Code 4 with Not Applicable Modify the CUSIP column for Schedules BA and DL and add a ISIN Column to Schedule DL for consistency with changes made to Schedule D. Add additional header for Schedule DL so it is easier to identify which schedule reflect securities included in other investment schedule and which reflects one line reporting. For 2017 P&C Statement of Actuarial Opinion and Actuarial Opinion Summary instructions, the changes include clarifications on current requirements. For 2017 itle Statement of Actuarial Opinion instructions, the changes include incorporation of the same changes made to the 2016 and proposed 2017 instructions for the P&C Statement of Actuarial Opinion. Add clarification to the line of business definitions for property and health for determining what line of business to report riders, endorsements and floaters. Also add clarification to the Analysis of Operation by Lines of Business instructions for life, heath and fraternal. Add additional definitions to the property line of business definitions in the appendix of the instructions for Annual Statement Lines 9, and 34. he change incorporates the Valuation Manual requirements regarding the Appointed Actuary, Qualified Actuary and the Actuarial Opinion into the Actuarial Opinion instructions. It also references the 2009 amendments to the Standard Valuation Law (#820), which authorizes the Valuation Manual. 06/14/ /14/2017, SA Annual 06/14/2017 P/C, Annual 06/14/2017 L, P/C, F, H Annual 06/14/2017 P/C Annual 06/14/2017 L, F Annual Annual /14/2017 L, F Annual

17 Blanks (E) Working Group: Adopted Modifications Page 5 of 13 8/22/ BWG Modify the instructions to reflect changes to NAIC Valuation of Life Insurance Policies Model Regulation (#830). Modify some of the column header descriptions in Part 1. Add additional columns to Part 1, 2A, and 2B and remove columns form 2A and 2B to allow room on the page for the columns added. Modify the lines used on Part 3. 10BWG Annual 2017 Remove the definition for notional amount from the Schedule DB General Instructions, Schedule DB, Part A General Instructions and replace with the definition of notional amount adopted by the Statutory Accounting Principles Working Group for SSAP No. 86 Derivatives in the general instruction for Schedule DB. Modify the instruction for the Notional Amount Column for Schedule DB, Part A and Part B. 06/14/ BWG Annual 2017 Modify the instructions and illustrations for Note 5A(4) and 5A (5) to reflect additional disclosures required by SSAP No. 37 Mortgage Loans. 06/14/2017 Annual 12BWG Annual 2017 Add a code to the Code Column to allow designation of SVO Identified Funds for valuation using systematic value and make the appropriate modifications to the instructions for the Book Adjusted/Carrying Value Column, the Unrealized Valuation Increase/ (Decrease) Column and the Current Year s (Amortization)/Accretion Column for Schedule D (Parts 1, 4 and 5) and Schedule DA (Part 1). Also add additional disclosure to Note 1C for mandatory convertible securities, and SVO-identified investments. 06/14/ BWG Annual 2017 Remove the repurchase agreement and reverse repurchase agreement disclosures from Note 5E and add new disclosures for them as 5F through 5I and renumber the remaining Note 5 disclosures accordingly. he illustrations for 5F through 5I will be data captured. Also Note 06/14/2017

18 Blanks (E) Working Group: Adopted Modifications Page 6 of 13 8/22/ B(5) and 17B(7) instructions will be modified to remove references to repurchase agreements and reverse repurchase agreements. 14BWG Annual 2017 Modify the current illustration for Note 31, High Deductibles and data capture. Add additional illustration to Note 31 also for data capture. 06/14/2017 P/C Annual 15BWG Annual 2017 Add additional disclosure item to Note 25, Change in Incurred Losses and Loss Adjustment Expenses (life, health, property, fraternal and title) and Note 32 Discounting of Liabilities for Unpaid Losses or Unpaid Loss Adjustment Expenses (property). 06/14/ BWG Annual 2017 Add new disclosure to Note 14, Liabilities, Contingencies and Assessments for Long-erm Care insolvencies related guaranty funds liabilities and assets. he new illustration for the disclosure will be data captured. 06/14/2017 L, P/C, F, H Annual 17BWG 1st Quarter 2018 Add a new line B10 to the bond section of the Cash from Investments Worksheet in the Cash Flow Statement instructions; renumber the remaining lines in the bond section (B10 and B11) and update the formula for the existing ling B11 to reflect the line addition. 08/06/ BWG 1st Quarter 2018 Move the total count of L (and D for property) status codes provided for Column 1 of Schedule to footnote and provide in the footnote a count for each status provided in Column 1. Add a crosscheck to ensure a status is provided for each jurisdiction on Lines 1 through /06/ BWG 1st Quarter 2018 Add a question to the General Interrogatories, Part 2 to help identify insurers that assume reinsurance business covering risks in at least two states. 08/06/2017 L, P/C, F, H 20BWG 1st Quarter 2018 Add question to the General Interrogatories Part 1 to determine if the reporting entity is part of a publicly traded group. Add clarifying instruction to Schedule Y, Part 1A when a Central Index Key 09/14/2017

19 Blanks (E) Working Group: Adopted Modifications Page 7 of 13 8/22/ BWG 21BWG 23BWG 24BWG Annual 2018 Annual 2018 Annual 2018 ("CIK") is provided. Add crosscheck between Column 6 and Column 7 of Schedule Y, Part 1A to ensure that when data is provided for one it is provided for the other. Combines the current Schedule F, Parts 3, 4, 5, 6, 7 and 8 into a single new Schedule F-Part 3-Ceded Reinsurance, modify the crosscheck references for Lines 13 and 16 of the Liability Page to reflect the changes to Schedule F and make changes to Schedule F Part 1 to eliminate the under $100,000 aggregation for consistency with the changes to Schedule F, Part 3. In addition changes for consistency are being made to the Schedule F, Part 3 Supplement for property, Schedule F instruction and blank for the Health Property Supplement and Schedule F, Parts 1 and 2 of the Life Workers Compensation Carve-out Supplement as these schedules are based on similar schedules in Schedule F of the property statement. Add language to General Interrogatory merger questions (5.1 annual and 4.1 quarterly) to require the filing of merger history with the NAIC, if the questions are answered "YES." Modify the annual statement instructions to reflect the requirement of filing the Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit and the Adjustments to the Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit by companies that are members of the life, health and annuity guaranty associations and write the respective lines of business. Annual 2018 Add new category lines for bank loans to Schedules D (Parts 1, 3, 4 & 5), D, DL (Parts 1 & 2) and E (Part 2) and adjust category line number reference in the Default Component Basic Contribution, 04/08/2017 L, P/C, H Annual 3/24/2018 3/24/2018 L, P/C, H Annual 3/24/2018

20 Blanks (E) Working Group: Adopted Modifications Page 8 of 13 8/22/2018 Reserve Objective and Maximum Reserve Calculations. 26BWG Annual 2018 Modifies the category line descriptions and adds crosschecks for lines , , , , , and to clarify the subtotal calculations for protected cells and authorization categories. Replaces old references to "Part 5" with updated "Part 3" references throughout. Revise the calculation references in the headings for Columns 60, 66, and 74. Revises the calculation references for Columns 72 and 73 to clarify certain calculations related to amounts in dispute. 3/24/2018 L, P/C Annual BWG BWG BWG BWG Annual 2018 Annual 2018 Annual 2018 Update the language for the different lines on the Schedule DB, Part D, Section 1 regarding exchange-traded derivatives and centrally cleared derivatives. Add the definition of "supranational" to the Supplemental Investment Risks Interrogatories section of the Annual Statement Instructions. Remove the reference to long-term care (LC) from the "ype of Reinsurance Assumed" and the "ype of Reinsurance Ceded" columns for Schedule S, Part 1, Section 2 and Schedule S, Part 3, Section 2. Remove codes GMDB, GMDBFW, ADB, DIS and the annuity-specific references from Schedule S, Part 1, Section 1 and Schedule S, Part 3, Section 1. Add a "ype of Business Assumed" column to Schedule S, Part 1, Sections 1 and 2. Add code to Schedule S, Part 1, Section 1 and Schedule S, Part 3, Section 1 to identify general account versus separate account. Annual 2018 Change the instructions for the P/C Statement of Actuarial Opinion to incorporate the Actuarial Guideline LI he Application of Asset Adequacy esting to Long-erm Care Insurance Reserves (AG 51) requirements and to increase 6/12/2018 6/12/2018 Annual 6/12/2018 L, F, H Annual 6/12/2018 P/C Annual

21 Blanks (E) Working Group: Adopted Modifications Page 9 of 13 8/22/2018 disclosures for accident and health (A&H) reported on a P/C blank BWG Annual 2018 Add "999" to the end of all line numbers for Schedule DBs. his will increase the number of lines available from 9,996 to 9,999,996, eliminating the need to accumulate data within certain categories. 6/12/ BWG Annual 2018 Add new "PL" and "PLGI" symbols to the instructions to identify private letter rated securities. Add a "YE" and "IF" symbol as indication of a new "carry-over" administrative procedure of the NAIC Securities Valuation Office (SVO). Modify definitions of the symbol "Z" to indicate a security is in transition from one reporting status to another. Add a general interrogatory for PL securities issued prior to Jan. 1, Remove designation matrices from the instructions and replace them with a list of administrative symbols valid for use on Schedule BA and Schedule D. Eliminate the use of "P" and "RP" with the designation and add specific line categories for perpetual preferred and redeemable preferred stock. Remove the "Market Indicator" column from Schedule D, Part 2, Section 2 for common stocks. 6/12/ BWG Annual 2018 Modify the instructions and illustration for Note 3A to reflect disclosure changes being adopted by the Statutory Accounting Principles (E) Working Group. 6/12/2018 Annual BWG Annual 2018 Modify the instructions for Note 20A, Note 20C and Note 20D to reflect changes to SSAP No. 100R Fair Value. Add a new disclosure Note 20E. Modify the illustrations for Note 20A and Note 20C to move the "NAV" column and data-capture it. 6/12/ BWG Annual 2018 Modify the instructions for Line 2 of the interest maintenance reserve (IMR) and Line 2 of the asset maintenance reserve (AVR) regarding bifurcation of other-thantemporary impairment (OI) investments subject to SSAP No. 26R Bonds. 6/12/2018 L, F Annual

22 Blanks (E) Working Group: Adopted Modifications Page 10 of 13 8/22/ BWG BWG BWG BWG BWG Annual 2018 Add additional instruction to the "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" categories to clarify not reporting investments in those categories when there is specific category for the investment. Annual 2018 Annual 2018 Annual 2018 Add illustration for Note 8H to be data-captured. Add electronic-only columns related to derivatives with financing premiums and additional instructions to the description column related to derivatives with financing premiums to Schedule DB, Part A and Part B for both Section 1 and Section 2. Add a new code to the "Code" column instructions for Schedule DB, Part A. Add a definition of "finance premiums" to the Schedule DB General Instructions. Add additional instructions to Schedule DB, Part A for Column 11 and Column 12 of Section 1 and Column 13 of Section 2. Modify the VM-20 Reserves Supplement, Part 3 and Exhibit 5 Aggregate Reserves for Life Contracts blanks and instructions to be consistent with the changes made to the Valuation Manual. Add a new Part 4 for the reporting of "Other Exclusions from Life PBR." Split the Column 2 for Question 1.01 in the Separate Accounts General Interrogatories into two new columns ("Registered with the SEC" and "Not Registered with the SEC") and renumber the remaining columns. Add a new Question 101A for private placement variable annuities and private placement life insurance. Annual 2018 Add a new disclosure to Note 10 to reflect changes to SSAP No. 97 Investments in Subsidiary, Controlled and Affiliated Entities 6/12/2018 6/12/2018 6/12/2018 L, F Annual 6/12/2018 SA Annual 6/12/2018 Annual

23 Blanks (E) Working Group: Adopted Modifications Page 11 of 13 8/22/2018 being considered by the Statutory Accounting Principles (E) Working Group. New instructions and illustration will be added as Note 10O. he illustration will be datacaptured BWG BWG 22BWG BWG 25BWG BWG BWG BWG Annual 2018 Annual st Quarter st Quarter 2019 Annual 2019 Annual 2019 Annual 2019 Delete the instruction and illustration for Note 12C(2) and renumber Note 12C(3) to Note 12C(2). Modify the instruction for Note 17C Wash Sales. Add question to the Supplemental Exhibits and Schedules Interrogatories regarding the filing of the Statement of Exemption in the 2nd Quarter. Combine the annual and quarterly reporting for life and fraternal companies onto one blank. his combined blank will be based on changes to the existing life blank. Life blank pages that are not being modified but have additional lines or columns not present on the fraternal blank are provided in the proposal as a reference for fraternal companies. Add language to the instructions of the cash flow statement regarding the inclusion of restricted cash or restricted cash equivalents in the beginning and ending balance in the cash flow statement. Add Annual Statement Line (ASL) 29 for "International" to the Exhibit of Premiums and Losses (state page) and provide instruction that data should only be provided for the "Other Alien" page and the "Grand otal" page. Split the column for annual statement line of business (ASL) for the illustration of Note 31A(1), High Deductibles, into two columns with one to capture ASL number and the other to capture the ASL description. Annual 2019 Add new line to Note 32, Analysis of Annuity Actuarial Reserves and Deposit ype Contracts by 6/12/2018 6/12/2018 Annual 3/24/2018 L, F 6/12/2018 L, F 3/24/2018 8/4/2018 P/C Annual 8/4/2018 P/C Annual 8/4/2018 L/F Annual

24 Blanks (E) Working Group: Adopted Modifications Page 12 of 13 8/22/2018 Withdrawal Characteristics that identifies surrender charges over 5% in the current year that will be less than 5% in the subsequent year. Add new Note 33, Analysis of Life Actuarial Reserves and Deposit ype Liabilities by Withdrawal Characteristics. hese are to be data captured. Renumber subsequent notes. About CareersNewsroom PrivacyStaffne RESOURCES Committees Committee List Committee Structure Exposure Drafts Meetings PROGRAMS & AFFILIAES Center for Insurance Policy & Research (CIPR) Insure U - Get Smart About Insurance National Insurance Producer Registry (NIPR) Interstate Insurance Product Regulation Commission (Compact) Members Member List Members by Zone Executive Committee Insurance Dept. Directory Library Consumers Consumer Information Source (CIS) Life Insurance Policy Locator Consumer Participation Glossary of Insurance erms APPLICAIONS System for Electronic Rate and Form Filing (SERFF) State Based Systems (SBS) OPins Premium ax Payment System mynaic isite+ Education Schedule Regulator Professional Designation Program Course Catalog ANALYSIS Industry Financial Statement Filing Market Conduct Annual Statement (MCAS) Uniform Certificate of Authority Application (UCAA) Company Code Application Securities Valuation Office (SVO) Structured Securities Group (SSG) Capital Markets Bureau Products Publications Financial Statement Data Automated Valuation Service Account Manager POLICY Financial Health International Fellows Application CONACS PERMISSIONS/REQUESS HELP Executive Office 444 North Capitol Street NW Suite 700 Washington, DC Switchboard Hours: 8:30 a.m. - 5:00 p.m. (ES) Monday - Friday Phone: (202) Fax: (816) Central Office 1100 Walnut Street Suite 1500 Kansas City, MO Switchboard Hours: 8:00 a.m. - 5:00 p.m. (CS) Monday - Friday Phone: (816) Fax: (816) Capital Markets & Investment Analysis Office One New York Plaza Suite 4210 New York, NY Switchboard Hours: 9:00 a.m. - 5:00 p.m. (ES) Monday - Friday Request permission to link to NAIC web content Request permission to reprint NAIC content Request an NAIC Speaker for an Event Hours: 8 a.m.- 4 p.m. C Monday - Friday (closed holidays) Submit Help Request help@naic.org Phone: (816)

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26 NAIC Blanks Working Group Adopted Schedule F effective for 12/31/18

27 NAIC BLANKS (E) WORKING GROUP Blanks Agenda Item Submission Form DAE: 12/12/2016 CONAC PERSON: Eva Yeung ELEPHONE: (816) ADDRESS: ON BEHALF OF: NAME: John Finston & om Botsko FOR NAIC USE ONLY Agenda Item # BWG MOD Year 2018 Changes to Existing Reporting [ X ] New Reporting Requirement [ ] REVIEWED FOR ACCOUNING PRACICES AND PROCEDURES IMPAC No Impact [ X ] Modifies Required Disclosure [ ] DISPOSIION ILE: AFFILIAION: ADDRESS: Chairs Rein. (E) ask Force and P/C RBC WG [ ] Rejected For Public Comment [ ] Referred o Another NAIC Group [ ] Received For Public Comment [ X ] Adopted Date 04/08/2017 [ ] Rejected Date [ ] Deferred Date [ ] Other (Specify) BLANK(S) O WHICH PROPOSAL APPLIES [ X ] ANNUAL SAEMEN [ ] QUARERLY SAEMEN [ X ] INSRUCIONS [ X ] CROSSCHECKS [ X ] BLANK [ X ] Life and Accident & Health [ X ] Property/Casualty [ X ] Health [ ] Separate Accounts [ ] Fraternal [ ] itle [ ] Other Specify Anticipated Effective Date: Annual 2018 IDENIFICAION OF IEM(S) O CHANGE Combines the current Schedule F, Parts 3, 4, 5, 6, 7, and 8 into a single new Schedule F-Part 3-Ceded Reinsurance, modify the crosscheck references for Lines 13 and 16 of the Liability Page to reflect the changes to Schedule F and make changes to Schedule F Part 1 to eliminate the under $100,000 aggregation for consistency with the changes to Schedule F, Part 3. In addition changes for consistency are being made to the Schedule F, Part 3 Supplement for property, Schedule F instruction and blank for the Health Property Supplement and Schedule F, Parts 1 and 2 of the Life Workers Compensation Carve-out Supplement as these schedules are based on similar schedules in Schedule F of the property statement. REASON, JUSIFICAION FOR AND/OR BENEFI OF CHANGE** he changes implement the new Reinsurance Credit Risk RBC charge methodology that was adopted by the Capital Adequacy (E) ask Force. It consolidates the previous Parts 3 through 8 of Schedule F into a single new Part 3, which eliminates duplication, promotes consistency of the reported ceded transactions, provides for greater automation, and reduces filing errors. his proposal was submitted to the Blanks Working Group by the Reinsurance (E) ask Force and Property and Casualty Risk-Based Capital Working Group. Comment on Effective Reporting Date: Other Comments: NAIC SAFF COMMENS ** his section must be completed on all forms. Revised 6/13/ National Association of Insurance Commissioners 57