NAIC BLANKS (E) WORKING GROUP

Transcription

1 NAIC BLANKS (E) WORKING GROUP Blanks Agenda Item Submission Form CONTACT PERSON: TELEPHONE: ADDRESS: ON BEHALF OF: NAME: Matti Peltonen DATE: 02/10/2011 FOR NAIC USE ONLY Agenda Item # BWG MOD Year 2011 Changes to Existing Reporting [ X ] New Reporting Requirement [ ] REVIEWED FOR ACCOUNTING PRACTICES AND PROCEDURES IMPACT No Impact [ X ] Modifies Required Disclosure [ ] DISPOSITION TITLE: Bureau Chief AFFILIATION: New York State Insurance Department ADDRESS: 25 Beaver Street, New York, NY [ ] Rejected For Public Comment [ ] Referred To Another NAIC Group [ ] Received For Public Comment [ X ] Adopted Date 06/30/2011 [ ] Rejected Date [ ] Deferred Date [ ] Other (Specify) BLANK(S) TO WHICH PROPOSAL APPLIES [ X ] ANNUAL STATEMENT [ ] QUARTERLY STATEMENT [ X ] INSTRUCTIONS [ X ] CROSSCHECKS [ X ] BLANK [ X ] Life and Accident & Health [ X ] Property/Casualty [ X ] Health [ ] Separate Accounts [ X ] Fraternal [ X ] Title [ ] Other Specify Anticipated Effective Date: Annual 2011 IDENTIFICATION OF ITEM(S) TO CHANGE Modify the Summary Investment Schedule by adding a line for derivatives which was added to the Accounting Practices and Procedure Manual but not yet reflected in the blank, a line for securities lending. Add a new Column 4 for securities lending and a Column 5 that totals Column 3 and the new Column 4. Add instruction to Supplemental Investment Risk Interrogatories, Line 2 to clarify when mutual funds should be included. REASON, JUSTIFICATION FOR AND/OR BENEFIT OF CHANGE** This proposal reflects changes being done to the Accounting Practices and Procedures Manual by the Statutory Accounting Principles Working Group reflecting the reporting of securities lending in the Summary Investment Schedule. The proposal also adds clarifying language on inclusion of mutual funds on Supplemental Investment Risk Interrogatories, Line 2. NAIC STAFF COMMENTS Comment on Effective Reporting Date: Annual 2011 should not be a problem Other Comments: This proposal is being presented to the Blanks Working Group simultaneously with a change being done to the Accounting Practices and Procedures Manual by the Statutory Accounting Principles Working Group. ** This section must be completed on all forms. Revised 6/13/ National Association of Insurance Commissioners 77

2 ANNUAL STATEMENT BLANK LIFE, HEALTH, PROPERTY, FRATERNAL AND TITLE SUMMARY INVESTMENT SCHEDULE Gross Investment Holdings Admitted Assets as Reported in the Annual Statement Securities Lending Total (Col. 3+4) Reinvested Collateral Investment Categories Amount Percentage Amount Amount Amount Percentage 1. Bonds: 1.1 U.S. treasury securities U.S. government agency obligations (excluding mortgage-backed securities): 1.21 Issued by U.S. government agencies Issued by U.S. government sponsored agencies Non-U.S. government (including Canada, excluding mortgage-backed securities) 1.4 Securities issued by states, territories, and possessions and political subdivisions in the U.S.: 1.41 States, territories and possessions general obligations Political subdivisions of states, territories and possessions and political subdivisions general obligations Revenue and assessment obligations Industrial development and similar obligations Mortgage-backed securities (includes residential and commercial MBS): 1.51 Pass-through securities: Issued or guaranteed by GNMA Issued or guaranteed by FNMA and FHLMC All other CMOs and REMICs: Issued or guaranteed by GNMA, FNMA, FHLMC or VA Issued by non-u.s. Government issuers and collateralized by mortgage-backed securities issued or guaranteed by agencies shown in Line All other Other debt and other fixed income securities (excluding short term): 2.1 Unaffiliated domestic securities (includes credit tenant loans and hybrid securities) 2.2 Unaffiliated non-u.s. securities (including Canada) Affiliated securities Equity interests: 3.1 Investments in mutual funds Preferred stocks: 3.21 Affiliated Unaffiliated Publicly traded equity securities (excluding preferred stocks): 3.31 Affiliated Unaffiliated Other equity securities: 3.41 Affiliated Unaffiliated Other equity interests including tangible personal property under lease: 3.51 Affiliated Unaffiliated Mortgage loans: 4.1 Construction and land development Agricultural Single family residential properties Multifamily residential properties Commercial loans Mezzanine real estate loans Real estate investments: 5.1 Property occupied by company Property held for production of income (including $... of property acquired in satisfaction of debt) Property held for sale (including $. property acquired in satisfaction of debt) Contract loans Derivatives 78. Receivables for securities Securities Lending (Line 10, Asset Page reinvested collateral)... XXX XXX XXX 810. Cash, cash equivalents and short-term investments Other invested assets Total invested assets 2011 National Association of Insurance Commissioners 78

3 ANNUAL STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL AND TITLE General Instructions SUMMARY INVESTMENT SCHEDULE This schedule was developed to assist regulators in identifying and analyzing the risks inherent in a portfolio of securities as well as identifying the differences in valuation and admission between those practices prescribed or permitted by the state of domicile and those set forth in the NAIC Accounting Practices and Procedures Manual. This schedule includes only those assets from the general account. The line captions were developed with the intention of grouping securities with common risk characteristics together. These groupings were determined based upon a review of schedules within the NAIC Annual Statement and the Federal Financial Institutions Examination Council Consolidated Reports of Condition and Income for A Bank With Domestic and Foreign Offices (FFIEC 031, also known as the Call Report ). Column 1 Gross Investment Holdings Amount This column represents the admitted value of an asset determined by applying the valuation procedures and admission criteria of the NAIC Accounting Practices and Procedures Manual. Column 2 Gross Investment Holdings Percentage Amount represents the percentage of the individual Column 1 line item to the Total Invested Assets amount presented in Column 1, Line Column 3 Admitted Assets as Reported in the Annual Statement Amount This column represents the admitted value of an asset determined by applying the valuation procedures and admission criteria prescribed or permitted by the state of domicile (i.e., the basis of admitted assets reported in the Annual Statement). A variation between the amounts in Column 1 and Column 3 would indicate that a reporting entity valued or admitted an asset differently under its state law than it would have under the NAIC Accounting Practices and Procedures Manual. An example includes a case where an entity was required to nonadmit an asset under its state investment law but was not required to nonadmit under the NAIC Accounting Practices and Procedures Manual because there are no investment limits within the Manual. Another example includes a case where an entity was not able to admit an asset under the NAIC Accounting Practices and Procedures Manual (i.e., it did not meet the requirements of SSAP No. 4 Assets and Nonadmitted Assets) but was able to admit the asset under the basket clause within the state investment law. Column 4 Admitted Assets as Reported in the Annual Statement Securities Lending Amount This column represents Schedule DL, Part 1 (Page 2, Line 10)reflected in their respective investment categories. Line 12, Total Invested Assets should equal Column 3, Line 9, Securities Lending. Column 46 Admitted Assets as Reported in the Annual Statement Percentage Amount represents the percentage of the individual Column 3 5 line item to the Total Invested Assets amount presented in Column 35, Line Detail Eliminated To Conserve Space 2011 National Association of Insurance Commissioners 79

4 Line 6 Contract Loans The value of all contract loans. (The amount reported in Column 3 should equal the amount reported in Column 3, Page 2, Assets.) Line 7 Derivatives The value of derivatives. (The amount reported in Column 3 should equal the amount reported in Column 3, Page 2, Assets.) Line 78 Receivable for Securities The value of receivable for securities. (The amount reported in Column 3 should equal the amount reported in Column 3, Page 2, Assets.) Line 9 Securities Lending (reinvested collateral Line 10, Asset Page) The value of securities lending. (The amount reported in Column 3 should equal the amount reported in Line 10, Column 3, Page 2, Assets. The amount reported in Column 1 should equal the amount reported on Schedule DL, Part 1, Line , Column 5.) Line 810 Cash, Cash Equivalents and Short-term Investments Line 911 Other Invested Assets Line 1012 Total Invested Assets The value of cash (Schedule E, Part 1), cash equivalents (Schedule E, Part 2) and short-term investments (Schedule DA, Part 1 including Exempt Money Market Funds and Class One Money Market Mutual Funds). The value of all other invested assets that have not been included in Lines 1 to 8 10 above. Sum of Lines 1 to 911. The amount reported in Column 3 should equal the amount of total invested assets reported in Line 12, Column 3, Page 2, Assets National Association of Insurance Commissioners 80

5 SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES Detail Eliminated To Conserve Space Line 2 Report the single 10 largest exposures to a single issuer/borrower/investment. Excluding: U.S. government securities (Part Six, Section 2(e)), U. S. government agency securities (Part Six, Section 2(e)), those U. S. Government money market funds (Part Six, Section 2(f)) listed in the Purposes and Procedures Manual of the NAIC Securities Valuation Office as exempt; property occupied by the company; and policy loans. Determine the ten largest exposures by first, aggregating investments from all investment categories (except the excluded categories) by issuer. The first six digits of the CUSIP number can be used as a starting point; however, please note that the same issuer may have more than one unique series of the first six digits of the CUSIP. For example, the reporting entity owns bonds issued by the XYZ Company of $500,000 and common stock of the XYZ Company of $600,000. In addition the reporting entity has a mortgage loan to the XYZ Company of $300,000. The total exposure to Issuer XYZ Company is $1.4 million ($500,000+$600,000+$300,000). Excluding: U.S. government securities (Part Six, Section 2(e)), U. S. government agency securities (Part Six, Section 2(e)), those U. S. Government money market funds (Part Six, Section 2(f)) listed in the Purposes and Procedures Manual of the NAIC Securities Valuation Office as exempt; property occupied by the company; and policy loans. Also exclude asset types that are investment companies (mutual funds) and common trust funds that are diversified within the meaning of the Investment Company Act of 1940 [Section 5(b) (1)]. Inclusion of mutual funds should be consistent with the instructions for the treatment of mutual funds in the Asset Concentration section of the Risk-Based Capital (RBC) filing. From the Life and Fraternal RBC instructions: The five largest holdings should exclude common stock in the FHLB, investment companies (mutual funds) and common trust funds, that are diversified with the meaning of the Investment Company Act, and affiliated investments other than investments in non-insurance subsidiaries. From the Property and Health RBC instructions: Asset types that are excluded from the calculation include: SVO Class 6 bonds, hybrids and preferred stock, affiliated common stock, affiliated preferred stock, affiliated bonds, property and equipment, U.S. government guaranteed bonds, SVO Class 1 bonds, hybrids or preferred stock, any other asset categories with risk-based capital factors less that 1 percent, and investment companies (mutual funds) and common trust funds that are diversified within the meaning of the Investment Company Act of 1940 [Section 5(b) (1)]. The pro rata share of individual securities within an investment company (mutual fund) or common trust fund are to be included in the determination of concentrated investments, subject to the exclusions identified. Title companies should follow the instructions for Property. In Column 2, list the categories of securities that are included in the total for each issuer (e.g., bonds, mortgage loans, etc.) Detail Eliminated To Conserve Space W:\QA\BlanksProposals\ BWG_Modified.doc 2011 National Association of Insurance Commissioners 81

6 This page intentionally left blank National Association of Insurance Commissioners 82