September 25, 2025
2025 NAIC Mid-Year SAPWG Summary
Johnson Lambert LLP is dedicated to keeping you informed of changes adopted by the NAIC. In this edition, you’ll find a summary of statutory accounting adoptions made by the Statutory Accounting Principles Working Group (SAPWG) during the first half of 2025 that will impact 2025 statutory basis financial statements and the latest updates on activities proposed or adopted by the Climate and Resiliency and Reinsurance Task Forces.
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Statutory Accounting Updates
| Ref # | SSAP No | Title | Revision Description | Effective |
|---|---|---|---|---|
| 2024-16 | Annual Statement Instructions | Repack and Derivative Investments | No change to statutory accounting. Clarifies that debt securities sold to a special purpose vehicle and then reacquired reflecting the addition of derivative or other components, shall be reported as a disposal and a reacquisition in the investment schedules. | 12.31.24 (adopted in 2025) |
| 2022-14 | IP 170 | Issue Paper 170 – Tax Credits Project | Adopts Issue Paper No. 170 to provide historical sequence of events and discussions throughout the Tax Credits Project through its adoption, which was effective 01.01.25. | 01.01.25 |
| 2024-22 | 104 | ASU 2024-01, Scope Application of Profits Interest and Similar Awards | Adopts FASB ASU 2024-01, Compensation – Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards, clarifying the scope of guidance on stock compensation in the form of profits interest is for employees or nonemployees, with modification to exclude application examples and clarify that profits interests and similar awards are to be considered under SSAP No. 104. | 02.25.25 |
| 2024-23 | 86, Annual Statement Instructions | Derivative Premium Clarifications | Clarifying and consistency revisions related to derivative financing premiums within SSAP No. 86 and in the annual statement instructions. | 02.25.25 |
| 2024-25 | 16 | SSAP No. 16 Clarifications | Updates references to the GAAP accounting standards codification related to electronic data processing equipment and software. | 02.25.25 |
| 2024-27 | Preamble | Issue Papers in Statutory Hierarchy | Classifies issue papers as Level 5 in the statutory hierarchy as a source of nonauthoritative guidance. May only be applied as authoritative guidance if it does not conflict with other sources of statutory guidance. Further, updates the process to develop issue papers to reflect current practice. | 02.25.25 |
| 2024-28 | 41 | Holders of Capital Notes | Clarifies that capital notes are to be non-admitted in any event in which the regulator halts principal or interest payments and updates references to capital notes throughout. Changes will be considered by the Blanks Working Group to update the capital note definition in the annual statement instructions for Schedule BA. | 02.25.25 |
| 2024-24 | INT 24-02INT 05-05 | Medicare Part D Prescription Payment Plan | Adopts INT 24-02: Medicare Part D Prescription Payment Plan and INT 05-05: Accounting for Revenues Under Medicare Part D Coverage to provide statutory accounting and reporting for the Medicare Part D prescription payment plan. | 03.30.25 |
| 2023-24 | IP No. 171 | Current Expected Credit Losses (CECL) | Adopts an attachment to IP No. 171 to reflect the historical GAAP impairment guidance that existed prior to the adoption of CECL. | 05.22.25 |
| 2024-07 | Annual Statement | Reporting of Funds Withheld and Modco Assets | No change to statutory accounting. Recommends changes to the Annual Statement to add a new reporting schedule to reinsurance Schedule S in the Life/Fraternal Annual Statement Blank and Instructions. The proposed changes will be considered by the Blanks Working Group in agenda item 2025-05BWG. | 05.22.25 |
| 2025-04 | Annual Statement | Capital Structure Code | No change to statutory accounting. Recommends deleting the “capital structure code” reporting column from Schedule D, Part 1, Section 1 and Section 2. The proposed changes will be considered by the Blanks Working Group in agenda item 2025-11BWG for year-end 2025. | 05.22.25 |
| 2022-19 | INT 23-01 | Net Negative (Disallowed) IMR | Extends the effective date of INT 23-01 to December 31, 2026 with automatic nullification on January 1, 2027. Establishes a current-period admittance limit for net negative interest maintenance reserve (IMR). | 08.11.25 |
| 2024-05 | Appendix A | Appendix A-791 | Deletes a sentence in A-791, Life and Health Reinsurance agreements, paragraph 2c, question and answer. | 08.11.25 |
| 2025-02 | 15 | ASU 2024-04, Induced Conversions of Convertible Debt Instruments | Adopts ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments, with modification to clarify when an induced conversion shall be recognized as an expense by an issuer and the fair value measurement of that expense. | 08.11.25 |
| 2025-09 | 51 | VM-22 Update Coordination | Minor consistency edits to reflect updates to the Valuation Manual in VM-22 PBR: Requirements for Principle-Based Reserves for Non-Variable Annuities. | 08.11.25 |
| 2025-16 | Various | Status Section Update | Adopts revisions to streamline the status section of each SSAP. | 08.11.25 |
| 2025-17EP | Various | Editorial Process – May 2025 | Adopts various editorial revisions to update disclosures, remove lingering references and remove superseded terminology. | 08.11.25 |
| 2024-20 | 1, Annual Statement | Restricted Asset Clarification | Modified co-insurance and fund withheld assets shall be captured as restricted assets. Recommends changes to the restricted asset disclosure in Note 5L on the annual statement. The proposed changes will be considered by the Blanks Working Group in agenda item 2025-06BWG. | 12.31.25 |
| 2025-05 | 1, Annual Statement | Reinsurer Affiliated Assets | Requires restricted asset disclosures on a quarterly and annual basis. Recommends changes to the restricted asset note disclosure to capture information, by investment schedule, of funds withheld assets that are related to/affiliated with the reinsurer. The proposed changes will be considered by the Blanks Working Group in agenda item 2025-10BWG. | 12.31.25 |
| 2025-06 | Annual Statement | AVR Line: Unrated Multi-Class Securities Acquired by Conversion | No change to statutory accounting.Recommends removing the AVR reporting line 8 “Unrated Multi-Class Securities Acquired by Conversion” and renaming it to “intentionally left blank” to prevent renumbering in the AVR Schedule. The proposed changes will be considered by the Blanks Working Group in agenda item 2025-12BWG. | 12.31.25 |
| 2025-07 | Annual Statement | Dividend General Interrogatory Update | No change to statutory accounting.Recommends updating the Life/Fraternal General Interrogatories, Part 2, number 14 to remove the disclosure as its not consistently included across all annual statement blanks. The proposed changes will be considered by the Blanks Working Group in agenda item 2025-08BWG. | 12.31.25 |
| 2025-08 | 84, Annual Statement | Medicare Part D Prescription Payment Plan Disclosures | New disclosures required in SSAP No. 84 – Health Care and Government Insured Plan Receivables, for Medicare Part D Prescription Payment Plan receivables. | 12.31.25 |
| 2023-28 | Annual Statement | Collateral Loan Reporting | No change to statutory accounting. Recommends revisions to the Annual Statement Blanks and Instructions to expand the reporting lines on Schedule BA and the Asset Valuation Reserve (AVR) Reporting Schedule for collateral loans by type of qualifying investment collateral that secures the loan. Changes will be considered by the Blanks Working Group in 2024-19BWG, with a proposed effective date of 01.01.26. | N/A |
During the Summer 2025 meeting, SAPWG and the Accounting Practices and Procedures (E) Task Force, adopted Ref # 2024-06, Risk Transfer Analysis on Combination Reinsurance Contracts; however, this Ref # is still pending consideration by the Financial Condition (E) Committee before it becomes final.
Rejected ASUs
The following FASB ASUs were rejected during the Summer 2025 meeting:
- ASU 2017-05 – Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
- ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
- ASU 2024-03 – Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
- ASU 2025-01 – Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date
- ASU 2025-02 – Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122
Climate and Resiliency (EX) Task Force
The Climate and Resiliency Task Force heard a presentation from the Alabama Department of Insurance and the Center for Risk and Insurance Research at the University of Alabama regarding the performance of fortified homes during Hurricane Sally. In response to concerns raised about the availability and affordability of insurance in the gulf coast region, the Alabama Department of Insurance, along with the Alabama state legislature, implemented the Strengthen Alabama Homes program, which provides grants to homeowners to retrofit to their homes to meet the fortification standards as prescribed by the Insurance Institute for Business and Home Safety. As Hurricane Sally was the first hurricane to hit a critical mass of homes that had participated in the program, the Alabama Department of Insurance elected to conduct a study to see if the results of the program were as originally hypothesized. The results from the study were promising showing that fortified homes performed better than conventionally constructed homes by reducing loss frequency by 55%, loss severity by 14%, and loss ratio by 51%. The study projected that if all homes within the sampled population were fortified, insurers would have saved between $99.9 – $111.8 million in claims. Overall, these promising results demonstrated that resiliency programs like those implemented by the Alabama Department of Insurance are effective in saving both consumers and insurers money leading to a better insurance market for all.
Reinsurance (E) Task Force
The Reinsurance Task Force heard from Troutman Pepper Locke LLP regarding a proposal for a new surety bond product to be an accepted form of collateral for property and casualty reinsurance contracts. The surety bond referred to as the “Unearned Premium Reinsurance Collateral Surety Bond”, is designed to serve as collateral for a reinsurer’s obligation to return ceded amounts to the cedent for unearned premium reserves. Traditionally, such collateral is required to be in the form of cash, a letter of credit, or securities listed by the NAIC’s Securities Valuation Office, which tie up a reinsurer’s cash and restrict its liquidity. The new surety bond would offer reinsurers flexibility with their cash while potentially serving as a functional equivalent to another form of collateral. Ultimately, as the authority to approve acceptable forms of collateral resides with each insurance commissioner, it will be up to the respective insurance departments to approve or reject this new surety bond.
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