Updates from the Statutory Accounting Principles Working Group’s August 2025 summer national meeting and May 2025 interim meeting

At the 2025 spring interim meeting, SAPWG adopted revisions to Issue Paper No.171 for historical records of Generally Accepted Accounting Principle (GAAP) impairment guidance which existed prior to the implementation of ASU 2016-13, Financial Instruments - Credit Losses. 

At the 2025 spring interim meeting, SAPWG adopted revisions to Statement of Statutory Accounting Principle (SSAP) No.1 to require restricted asset disclosures on a quarterly and annual basis. This agenda item also communicates support of the Blanks (E) Working Group proposal 2025-10 BWG to expand the restricted asset note disclosure to capture information, by investment schedule, of fund withheld assets that are related to/affiliated with the reinsurer. 

At the 2025 spring interim meeting, SAPWG adopted revisions to SSAP No. 84 – Health Care and Government Insured Plan Receivables to add disclosures around the Medicare Prescription Payment Program (MP3). The adoption accompanies a Blanks (E) Working Group proposal to allow for initial reporting for year-end 2025, meaning data capture should begin immediately. Key disclosure elements include balances before and after non-admission, aging and write offs. 

At the 2025 summer national meeting, SAPWG adopted revisions to INT 23-01 to extend the effective date to Dec. 31, 2026. Revisions also clarify guidance and incorporate additional requirements to admit net negative IMR, as follows:  

• Clarification on the adjusted capital and surplus calculation (from financials filed previously), with an additional cap to limit admittance to 10% of current unadjusted capital and surplus.  
• New paragraph requiring completion of the data-captured template disclosures to admit net negative IMR.  
• New paragraph requiring net negative IMR to be captured in the life principle-based reserves (PBR) calculation or asset adequacy testing using the cash flow testing methodology (AAT/CFT) pursuant to VM-20, with a requirement to prepare a reconciliation to ensure that reserves are not overstated.  
• Clarification on the derivative disclosure roll-forward and to ensure that the amount disclosed for “net negative disallowed IMR” reflects the total.  
• Revised effective date guidance to Dec. 31, 2026, with automatic nullification on Jan. 1, 2027.  

ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments clarifies how to determine whether a settlement of convertible debt at terms that differ from the original conversion terms should be accounted for under the induced conversion or extinguishment guidance. Under the ASU, to account for the settlement of a convertible debt instrument as an induced conversion, an inducement offer is required to provide the debt holder with the consideration (in form and amount) issuable under the conversion privileges provided in the terms of the instrument. Current statutory accounting guidance requires recognition of an expense for the fair value of the additional consideration issued to induce conversion. The majority of the guidance adopted by the ASU relates to paragraphs in GAAP guidance that had previously been rejected for statutory accounting purposes. 

At the 2025 summer national meeting, SAPWG adopted revisions to clarify that the additional consideration provided by the inducement offer shall be recognized when the offer is accepted by the debt holder, including when the inducement shall be recognized as an expense by the issuer as well as the fair value measurement on that expense. This may defer slightly the recognition of the expense under SSAP No. 15 – Debt Company Obligations and Holding, but aligns with GAAP on this guidance. Aligning the recognition with the acceptance of the inducement is not expected to have a significant impact on insurers. 

At the summer national meeting, SAPWG adopted minor consistency revisions to SSAP No.51 – Life  Contracts to reflect updates to the Valuation Manual in VM-22 PBR: Requirements for Principle-Based Reserves for Non-Variable Annuities to incorporate new PBR requirements between the different methods of reserving.  

At the 2025 summer national meeting, SAPWG adopted editorial revisions to three SSAP’s and one interpretation, as detailed below. 

• SSAP No. 26 – Bonds: Update Disclosure 40.f. to Match Schedule D, Part 1A Maturity categories. Schedule D, Part 1A has maturity categories of 10-20 years and over 20 years. The disclosure in SSAP No. 26 only goes up to an after 10-year category.  
• SSAP No. 41 – Surplus Notes: Remove remaining reference to a “CRP” designation in paragraph 11. Whether the designation is required from a Credit Rating Provider or from the SVO is contingent on the Purposes and Procedures Manual of the NAIC Investment Analysis Office.  
• SSAP No. 56 – Separate Accounts: Delete Disclosure 32.d. The disclosure is no longer applicable with previously adopted revisions.  
• INT 22-01: Freddie Mac When Issued K-Deal (WI Trust) Certificates: Remove old SSAP No. 43R – Loan-Backed and Structured Security terminology. 

 At the 2025 summer national meeting, SAPWG adopted revisions to clarify risk transfer on combination reinsurance contracts with interdependent contract features. The adopted clarifications are immediately effective for new/newly amended contracts, with provisions to allow a Dec. 31, 2026 effective date for existing contracts to allow time for industry and regulator assessment. In addition, SAPWG adopted 

revisions to delete a sentence in A-791, paragraph 2c in the Q&A (Life and Health Reinsurance Agreements) as it was deemed unnecessary. 

The adopted guidance provides clarity that contracts with interdependent features must be analyzed in the aggregate for risk transfer and stresses compliance with existing A-791 requirements including that contract(s) cannot: 

1) Potentially deprive the ceding insurer of surplus at the reinsurer’s option or automatically upon the occurrence of some event (A-791, paragraph 2b) 

2) Potentially require payments to the reinsurer for amounts other than the income realized from the reinsured policies (A-791, paragraph 2e) 

3) Contain any of the other conditions prohibited by Appendix A-791 related to risk transfer 

The exposed A-791 QA language also focuses on not having the potential for payments out of surplus at the reinsurer’s option or automatically upon the occurrence of some event. This means that in all cases there would be an established liability to absorb any possible payments and notes that the yearly renewable term (YRT) premium simply being at or below the valuation net premium does not ensure that payments from surplus are not possible. 

At the 2025 summer national meeting, SAPWG adopted revisions to the 2026 AP&P Manual to streamline the status section of each SSAP which will no longer reference issue papers and references to “substantively revised” being changed to “conceptually revised” for consistency between previously adopted policy statement language. 

SAPWG exposed expanded revisions to SSAP No. 22 – Leases to clarify that sale leasebacks with restrictions on access to the cash proceeds do not qualify for sale leaseback accounting and should be accounted for by the seller using the financing method. 

This item has a public comment period ending Oct. 17, 2025. 

On May 22, 2025, SAPWG exposed revisions to SSAP No.37 – Mortgage Loans to expand the scope to include qualifying investment trust holding residential mortgage loans to be reported on Schedule B- Mortgage. Key revisions include: 

• Proposed updates to permit qualifying statutory trusts to hold cash and cash equivalents, and real estate obtained through foreclosure, along with clarification on the applicability of SSAP No. 2 and SSAP No. 40.  
• Replacement of the restriction to first-lien mortgages as well as the requirement to hold the entire loan with broader language permitting any single residential mortgage loan eligible under SSAP No. 37 to be held in a qualifying statutory trust.  
• Additional criteria for a qualifying statutory trust series which requires the qualifying trust to maintain separate and distinct records from the overall statutory trust and other series.  
• Clarification that an insurer may pledge qualifying statutory trust assets as collateral; however, assets encumbered or pledged to a third party by action of the statutory trust itself are non-admitted.  
• Eliminated management fee disclosure and added language elsewhere clarifying that statutory trust activities are subject to related party and affiliate disclosure requirements.  
• New requirement to disclose a summary of assets and liabilities held within qualifying statutory trusts. Since such balances are to be reported as if directly held by the insurer, this disclosure is intended to provide regulators with a high-level overview of the balances held within the trust(s).  

This re-exposed item has a public comment period ending Oct. 17, 2025. 

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (the ASU) to reduce complexity in income tax accounting standards. The ASU removes several exceptions to calculating and assessing income taxes and tax deferrals. The ASU also simplifies the guidance for franchise (non-income based) taxes, goodwill tax basis step-ups, allocation of deferred tax to subsidiaries, reflection of changes to tax law in the interim period calculation of the effective tax rate and other minor improvements. 

At the 2025 summer national meeting, SAPWG exposed revisions to adopt with modification ASU 2019-12 Simplifying the Accounting for Income Taxes in SSAP No.101 – Income Taxes and fully incorporate existing guidance in APB28, paragraph 19 and prior APB paragraph 20. 

The only ASU revisions recommended for adoption are those to ASC 740-270-25-5, as most of the updated ASU provides clarification on topics not applicable to statutory accounting. 

This item has a public comment period ending Oct. 17, 2025. 

SAPWG exposed a series of annual statement blanks revisions: 

• Exposed revisions to incorporate a new disclosure to identify private placement securities in the investment schedules and to incorporate an aggregate disclosure that details key investment information by type security (public and private placement type). This item is proposed to be effective Dec. 31, 2026. Exposed revisions to the life/fraternal annual statement blank remove reporting line 8, “Unrated Multi-Class Securities Acquired by Conversion,” from the asset valuation reserve (AVR). 
• Exposed revisions to eliminate the investment subsidiary concept from the annual statement instructions, effective Dec. 31, 2026. 

The working group will consider sponsoring blanks proposals to incorporate the reporting changes. 

Ref 2025-19 and Ref 2024-21 have public comment periods ending Sep. 19, 2025, and Oct. 17, 2025, respectively. 

At the 2025 summer national meeting, SAPWG exposed revisions to propose consistent disclosures for certain reporting elements between SSAP No. 26 – Bonds, SSAP No. 43 – Asset-Backed Securities and for non-bond debt securities and residuals in SSAP No. 21 – Other Admitted Assets.  

The edits also propose disclosures for residuals that identify the company’s measurement method, whether the company is transitioning from the practical expedient to the allowable earned yield (AEY) method, and for those following the AEY method, information comparable to SSAP No. 43 for impaired securities. The proposed revisions also converge and clarify language across SSAPs and/or remove references that imply quarterly reporting when the disclosure is annually audited only. 

This item has a public comment period ending Oct. 17, 2025. 

In May 2025, SAPWG received comments from the industry requesting clarification on how to complete fair value disclosures for retirement plan assets measured at net asset value (NAV), as NAV was not explicitly referenced as a leveling option in SSAP No. 92 – Postretirement Benefits Other Than Pensions or SSAP No.102 – Pensions. 

At the 2025 summer national meeting, SAPWG exposed revisions to SSAP No. 92 and SSAP No.102 to clarify that assets held at NAV shall be included in the required fair value disclosure. 

This item has a public comment period ending Oct. 17, 2025.