NAIC 2023 Summer National Meeting Highlights
View Debevoise In Depth
Key Takeaways:
- The Statutory Accounting Principles (E) Working Group adopted revisions to SSAP 26R – Issuer Credit Obligations – and SSAP 43R – Asset-Backed Securities – codifying its “principles-based bond definition” for determining when an investment can be reported as a “bond.” The adoption is effective as of January 1, 2025.
- The NAIC is continuing to consider potential changes to the risk-based capital treatment of residual tranches of certain structured securities, including CLOs. There remains uncertainty around the future capital treatment of CLOs, including their residual tranches.
- The NAIC continues to evaluate whether negative IMR amounts should properly be admitted as assets on insurers’ balance sheets. In the meantime, the NAIC has adopted an interim solution to allow insurers to admit net negative IMR up to 10% of such insurer’s adjusted capital and surplus, subject to completion by the reporting insurer of a new reporting entity attestation.
- The NAIC is continuing its (nonexclusive) focus on private equity in the insurance space, notably focusing on certain offshore reinsurance arrangements with the adoption of a reinsurance comparison worksheet, designed to aid regulators in assessing cross-border and other complex reinsurance treaties, and revisions to the NAIC’s Financial Analysis Handbook and Financial Condition Examiners Handbook, intended to guide regulators in their review of inter-affiliate service agreements.