Article
Updates from the Statutory Accounting Principles Working Group’s March 2025 spring national meeting
April 15, 2025 · Authored by Daniel E. Buttke
This report summarizes key activities of the National Association of Insurance Commissioners (NAIC) Statutory Accounting Principles (E) Working Group (SAPWG) at the spring 2025 national meeting that took place on March 24, 2025.
SAPWG discussed a variety of topics including loan reporting, the Medicare Prescription Payment Program, interest maintenance reserve (IMR) and more. Insurance organizations should take note of these changes as they may significantly affect their accounting in 2025 and beyond.
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This report summarizes key activities of the National Association of Insurance Commissioners (NAIC) Statutory Accounting Principles (E) Working Group (SAPWG) at the spring 2025 national meeting that took place on March 24, 2025.
SAPWG discussed a variety of topics including collateral loan reporting, the Medicare Prescription Payment Program (MP3), interest maintenance reserve and more. Insurance organizations should take note of these changes as they may significantly impact their accounting in 2025 and beyond.
Adopted revisions to statutory guidance
All adopted revisions to statutory guidance noted below are classified as Statutory Accounting Principle (SAP) clarifications and considered effective immediately after adoption by SAPWG, unless specifically noted otherwise.
At the spring national meeting, SAPWG adopted reporting recommendations to provide granular reporting lines on Schedule BA in order to identify the type of collateral that secures the loan. The Schedule BA reporting lines for collateral loans are as follows:
- Collateral loans backed by mortgage loans
- Collateral loans backed by joint ventures, partnerships or limited-liability companies (LLCs)
- Collateral loans backed by residual interests
- Collateral loans backed by debt securities
- Collateral loans backed by real estate
- Collateral loans not captured in the specific reported lines
Each category would be further bifurcated as either affiliated or unaffiliated. The effective date of the SAPWG adoption is intended to align with the adoption of a future Blanks proposal, which is currently exposed.
SSAP No. 1 — Accounting Policies, Risks & Uncertainties and Other Disclosures
At the spring national meeting, SAPWG adopted revisions to require restricted asset disclosure for modified coinsurance (modco) and funds withheld assets reported within a ceding company’s financial statements. As well as, at the request of interested parties, recommended note illustrations and general interrogatory revisions to improve the restricted asset disclosure.
The Medicare Prescription Payment Program (MP3), effective in 2025, requires insurers to pay pharmacies the out-of-pocket costs at the point of sale for enrollees who have opted into MP3. The enrollees then have the remaining policy term to make installment payments to the insurer. At the spring national meeting, SAPWG adopted revisions to INT 24-02 — Medicare Part D Prescription Payment Program and edits to INT 05-05 — Accounting for Revenues Under Medicare Part D Coverage to provide accounting and reporting for MP3.
