Wisconsin IASA. Statement Update. Wisconsin Chapter IASA. Statutory Update. Statement Update Risk-Based Capital Other NAIC Stuff

Transcription

1 Wisconsin Chapter IASA Statutory Update September 22, 2017 Connie Jasper Woodroof NAIC Liaison, StoneRiver Agenda Statement Update Risk-Based Capital Other NAIC Stuff Statement Update 1

2 Jurat Life insurance policy locator contact Added as electronic section to all statements; but only applicable to entities with life products Name, address, telephone number, address Some states require signed Jurat as part NAIC filing Instructions on how to accommodate in General Electronic Filing Directive Notes Note #1 Additional disclosure for mandatorily convertible securities and SVO-identified funds From revisions to SSAP No. 26R Note #5 Repurchase and reverse repurchase agreements Removed previous disclosure including what was in Note #17 New disclosures put in place (still in Note 5) Repurchase agreements accounted for as secured borrowings Reverse repurchase agreements accounted for a secured borrowings Repurchase agreements accounted for as a sale Reverse repurchase agreements accounted for as a sale Where quarterly info indicated, only need to complete 4 th quarter for 2017 year-end Will be required in quarterly beginning 2018 A lot of detailed information required Revisions to SSAP No. 103R 2

3 Notes Note #5 Mortgage Loans participant or co-lender (SSAP No. 37) Prepayment penalties & acceleration fees (SSAP No. 26R) Short sales (SSAP No. 103R) Note #12 Defined benefit plan funded status Notes Note #14 (SSAP No. 35R) Discount rate used for reporting long-term care (LTC) guaranty fund liabilities and assets Specific, separate information on LTC insolvencies and assessments Note #25 (SSAP No. 55) Significant changes in methodology and assumptions used for calculating unpaid losses and loss adjustment expenses General Interrogatories Self-designated 5*GI securities Notes to Financials #5 Serves as company self-certification No longer file certification with SVO 5*GI codes added for use in investment schedules 3

4 Investment Schedules Money Market Mutual Funds (MMMFs) (SSAP Nos. 2R and 26R Blank and instructional changes to report all MMMFs as cash equivalents on Schedule E Part 2 Money Market Mutual Funds (MMMFs) Schedule E Part 2 Cash Equivalents Investment Schedules Money Market Mutual Funds Removal from Schedule DA and Schedule D Part 2 CUSIP column also removed from Schedule DA Reclassification on Summary Investment Schedule Removal from Summary by Country Exclusion from Schedule D Part 1A AVR instructions updated 4

5 Schedule D Mandatory Convertible Bonds (SSAP No. 26R) Reported book/adjusted carrying value to be lower of amortized cost or fair value during the period prior to conversion Short Sale Reporting (SSAP No. 103R) New code SS added to code listing Instructions to Schedule D Parts 1 and 2; Schedule DA Part 1; Schedule E Part 2 Schedule D SVO-Identified Funds (SSAP No. 26R) BACV equals fair value or systemic value unless designated as qualifying security for 2018 systemic value Systemic value can be deferred to 1/1/2018 Use * in Code Column to identify SVO-identified funds that will use systemic value in 2018; for 2017 use measurement method used through out year Systemic value can be used as of 12/31/2017 Election of systemic value irrevocable Can use fair value instead of systemic value Fair value column report fair value or net asset value IMR Holding period is weighted-average life of underlying bonds Schedule D Part 1 Collateral Type Column Reduction of codes Capital Structure Column Option 4 changed from Other to Not Applicable 5

6 Schedule DB Swaptions Notional definition and instructions updated Both from revisions of SSAP No. 86 Subtitle clarification Schedule DL Schedule DL CUSIP Column instructions now conform to corresponding Schedule D CUSIP instructions Addition of International Security Identification Numbering (ISIN) Column Electronic only reporting column 6

7 Long-Term Care Supplement Instructional changes for completing LTC Form 5 Grand total page to be filed Added crosschecks to Columns 1, 2 and 3 to LTC Form 2, Part C and Form 3 Lines of Business (LOB) Clarifies determining LOB reporting for riders, endorsements and floaters If acts like a separate policy with separate premium, deductible and limit, treat like a stand-alone policy in LOB it most nearly resembles If not additional premium, separate deductible or limit, report in same LOB as base policy In addition for LAH and Fraternal: Incidental benefits like permanent disability, accidental death, accidental death and dismemberment in same LOB as contracts associated with Property/Casualty & Title Statement of Actuarial Opinion & Actuarial Opinion Summary Instructional clarifications to assist actuaries in understanding regulatory expectations. 7

8 Property/Casualty Notes to Financials Note #31 (SSAP No. 65) Greatly expanded disclosures for high deductibles Applies to all lines of business Note #32 (SSAP No. 65) Additional information on use of tabular discounting Property/Casualty Additional LOB definitions of sublines to match P&C Uniform Product Code Matrix. Inland Marine Other Accident & Health Other Liability Write-ins Property/Casualty New active status code on Schedule T Cybersecurity & Identity Theft Insurance Coverage Supplement Reorganization New format 8

9 2017 LAH/Fraternal/ Separate Accounts Annual New instructions for Actuarial Opinion Reporting of VM-20 reserves (Principles-Based Reserves - PBR)(SSAP No. 51R) New line on Analysis of Increase in Reserves During Year Exhibit 5 Aggregate Reserves for Life Contracts Five-Year Historical New supplement 2017 LAH/Fraternal/ Separate Accounts Annual Variable annuities with guarantees Delete General Interrogatories Part 2, 9.1 and 9.2 in LAH, 24.1 and 24.2 in Fraternal, 2.2 in SA Changes Actuarial Memorandum Add variable annuities with guarantees supplement Interest Maintenance Reserve (IMR) Holding period for SVO-identified funds designated for systemic value is weighted-average life of underlying bonds LAH/Fraternal Previous Supplemental XXX/AXXX Reinsurance Exhibit New name Supplemental Term and Universal Life Reinsurance Exhibit New formatting and instructions Due date remains April 1 9

10 Other Statements Health Delete Property/Casualty Supplement & IEE Title Same changes made to 2016 and 2017 P/C Actuarial Opinion Blanks Working Group Combining of Fraternal and Life blanks An electronic only filing as of June 30 listing owned Schedule D investments Only 4 columns CUSIP, par value, book/adjusted carrying value, and fair value Now being debated at Financial E Committee Would take policy change Risk-Based Capital 10

11 All Formulas All adopted proposals posted on Capital Adequacy Task Force s website until November 1 Click on Related Documents tab at right All Formulas Treatment of money market mutual funds changed to match statement changes Operational Risk add-on approach adopted 2017 Factor 0% Change of factor for supplemental benefits within stand-alone Medicare Part D coverage 50% Stop Loss line of business subject to a tieredfactor approach PRBC Investment affiliates (Type 7) now with set factor of.225 Catastrophe Risk Charge Now official part of formula; no longer information only Line 1 Underwriting Risk Factors updated Line 4 Underwriting Risks updated First time since

12 RBC Life Risk-Based Capital (LRBC) Addition of Authorized Control Level RBC ratio Already disclosed in PRBC and HRBC Instructional changes to Primary Security Shortfall Only list cessions subject to AG 48 If treaties include some AG 48 policies and some Model #787 policies, only AG 48 cessions included Health Risk-Based Capital (HRBC) Guidance for start-up companies for Excessive Growth Charge Investment RBC Working Group Several projects not finalized yet RBC bond reporting categories Bond factors Same for all insurers? Or difference between LRBC (FRBC) and other formulas? Academy s Bond Factors Report on website Bond size factor Probably maintaining current format but revising factors Real Estate Current factors too high in relation to materiality? ACLI proposal re-exposed for comment Other NAIC Stuff 12

13 December NAIC Meeting Many groups are not meeting Will most likely see a big increase in the number of conference calls between August and end of the year 37 Valuation Of Securities Task Force (VOSTF) Remember - The Purposes and Procedures Manual of the NAIC s Investment Analysis Office is only published annually. Adopted revisions during year posted at VOSTF Valuation guidance for SCA companies removed from SVO Manual and placed into AP&P Manual as appendix to SSAP No. 97 Expansion of NAIC Bank List to include eligible non-banks Monthly publication can be found at

14 VOSTF Proposed modification of FE process Policy changes that would allow the IAO (Investment Analysis Office) oversight of FE designations Five major policy change being considered IAO have ability to change automated FE designations Production of designations for Private Letter Ratings Resolve discrepancies between official NAIC designations and insurer s designations Review of requiring rated securities to be filed with IAO Changes to regulatory process because of above implementation ; for example, changes to Jumpstart report Current target date 1/1/2018 for Private Letter Ratings; yearend 2018 for others Other Group Capital Requirement Working Group Group Solvency Issues Working Group Reinsurance Task Force Questions? Please contact: Connie Jasper Woodroof x5761 connie.woodroof@stoneriver.com 14

15 Thank You 15