Insurance: NAIC 2022 Fall meeting

Key impacts

The National Association of Insurance Commissioners adopted the following guidance:

• SSAP Nos. 19 and 73 to clarify that when a lease terminates early, the amortization of leasehold improvements will cease, and any remaining unamortized leasehold improvement balance will be expensed. The revisions include an exclusion for healthcare delivery assets.
• SSAP No. 86 to adopt, with modification, US GAAP guidance about portfolio and partial-term fair value hedges.
• INT 22-02 to provide an exception to insurers from assessing the effects on the insurer’s valuation allowance and deferred tax assets from the Corporate Alternative Minimum Tax through Q1 2023. It also provides subsequent event exceptions.

The NAIC exposed revisions to the following guidance:

• Treatment of negative interest maintenance reserve, specifically related to current guidance on the non-admission of negative IMR.
• SSAP No. 21R to clarify that an asset pledged as collateral must qualify as an admitted asset for a collateral loan to be admissible.
• New or revised SSAP No. 93 to expand current guidance to capture all tax equity investments that qualify under specified criteria and provide general federal business tax credit or state premium tax credit.
• Nullification of INT 03-02 to eliminate inconsistent guidance with SSAP No. 25 for economic and non-economic related party transactions.
• Schedule D-1 reporting and the Principles-Based Bond Definition issue paper, in connection to the principles-based bond project.

The NAIC discussed the following guidance:

• Qualitative responses to the Economic Scenario Generator field test.
• Risk-based capital charges for collateral loan obligations.