Texas Chapter IASA · • Examples of “roll-forward” included as an Appendix ... StoneRiver, Inc. 9 Texas Chapter IASA ... • Updates to allow the 2012 Group Long-Term Disability

StoneRiver, Inc. 1

Texas Chapter IASA

Proprietary 2014 StoneRiver, Inc.Proprietary 2014 StoneRiver, Inc.

NAIC Update

Texas IASANovember 21, 2014Connie Jasper WoodroofStoneRiver, NAIC Liaison

Texas IASANovember 21, 2014Connie Jasper WoodroofStoneRiver, NAIC Liaison

Proprietary 2014 StoneRiver, Inc.

AgendaAgenda

• 2014 Annual Statement

• 2014 RBC

• Accounting Update


2014 Annual Statement

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Texas Chapter IASA


General Interrogatories 25.2General Interrogatories 25.2

Other Federal Home Loan Bank Changes

• Notes to Financials 5, 11

• “Code” column in Investment Schedules

• Associated SSAP changes: Nos. 1, 15, 30, 52

• RBC – All formulas


Investment Schedules – Code Column Investment Schedules – Code Column


Notes to Financials #5Notes to Financials #5

• Restricted Assets

• Revised from PY

• Capital Finance Investments (5I)

• From adoption of SSAP No. 105

• Structured Notes

• Revisions to SSAP No. 26 and 43R

• Guidance posted on Blanks Working Group website

• CUSIP, Actual Cost, Par Val, BACV, Mtg referenced?

• Offsetting and Netting of Assets and Liabilities

• Moved from Note 21 to Note 5

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Texas Chapter IASA


Note to Financials #5Note to Financials #5

Restricted Assets


Notes to FinancialsNotes to Financials

• Note #12

• Multiemployer Plans

• Revisions to SSAP Nos. 92 and 102

• Note #21

• Move Joint and Several Liabilities disclosure from Note 21 to Note 14

• Note 14 renamed to Liabilities, Contingencies and Assessments



• Modification of PY Affordable Care Act (ACA) assessment information

• Now covered under new SSAP No. 106 (formerly under SSAP No. 35R)

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Texas Chapter IASA



• Risk sharing provisions of the Affordable Care Act (ACA)

• Currently INT 13-04, SSAP No. 35R

• Separate SSAP being developed

• ACA Risk Sharing Programs Disclosures

• Requires quarterly and annual disclosures of “balance” amounts

• Quarterly disclosures made retroactive to 1st

quarter 2014

• Requires quarterly and annual “roll-forward” balances

• Beginning annual 2014 and thereafter

• Examples of “roll-forward” included as an Appendix


Investment SchedulesInvestment Schedules

• Schedules A, B, BA

• Add postal code electronic column

• Schedule A – location of real estate

• Schedule B – location of real estate securing mortgage loans

• Schedule BA – location of properties for investments having the underlying characteristics of real estate and/or mortgage loans

• If multiple properties, list all zips from highest to lowest in property value



• Schedules A, B, BA

• Property type electronic column

• Primary use of property

OF – Office

RT – RetailMU – Apartment/MultifamilyIN – IndustrialHC – Medical/Health CareMX – Mixed useLO – LodgingOT - Other

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Texas Chapter IASA



• Schedule A, B, BA

• State column now accepts 3-character country code

• Schedules B, BA

• Maturity date electronic column

• Mortgage loans and those investments having the underlying characteristics of mortgage loans

• State date mortgage loan matures


Supplemental Compensation ExhibitSupplemental Compensation Exhibit

• New format for Part 2 – Officers and Employees

Listing still for top 10 employees/officers, but now must include PEO, PFO; next 3 most highly compensated executive employees if >$100,000; next 5 most highly compensated employees if >$100,000.



• New format for Part 3 – Directors

Applies to all Directors

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Texas Chapter IASA



• Provide a narrative description of any material

factors necessary to gain an understanding of the information disclosed in the tables.

New Part 4 – Narrative Description of Material Factors


LAH and FraternalLAH and Fraternal

• Actuarial Opinion

• Actuary must be appointed directly by, or by the authority of, Board of Directors; and report to Board or Audit Committee

• Actuary must meet certain qualifications

• Opinion must follow guidelines and standards

• Separate Actuarial Opinion for each company filing an annual statement

• Exhibit 5

• Modified definition of contingent deferred annuities (CDA) in instructions


LAH and Fraternal LAH and Fraternal

• Asset Valuation Reserve (AVR)

• New format for calculating mortgage loan and underlying characteristics of mortgage loan portion of AVR

• Utilized RBC mortgage loan division and treatment

• Supplemental Exhibits & Schedules Interrogatories

• Will Regulatory Asset Adequacy Issues Summary be filed with state by March 15?

• Will Actuarial Memorandum required by Actuarial Guidelines be filed with state by April 30?

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Texas Chapter IASA


LAH & Fraternal StatementLAH & Fraternal Statement

• New reinsurance supplement for XXX/AXXX products


LAH, Fraternal, HealthLAH, Fraternal, Health

• General Interrogatories – Part 2

• Question to capture direct written premium, incurred claims, and number of covered lives for CY ordinary life

• By product type

• New question regarding captive affiliates reported on Schedule S – Part 3 as authorized reinsurance


LAH, Fraternal and HealthLAH, Fraternal and Health

• Schedule S – Part 3 – format changes

6Type of

Reinsurance Ceded

7

Type of Business

Ceded

Insert available code to indicate type of business

Does NOT completely align

With Analysis of Ops by LineOf Business

For 2014, must provide for

captive reinsurance, A&H products; may report “Other”

for other non-captive reins

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Texas Chapter IASA


HealthHealth

• Formal adoption of Exhibit 3A instructions issued in 2013 as guidance


Property/CasualtyProperty/Casualty

• Actuarial Opinion and Actuarial Opinion Summary Supplement (also Title companies)

• Includes revised reporting for pooled companies and other technical changes

• Add new line (2.4) to state page, IEE - Parts II and III for Private Crop

• Combined Statement

• Add statement contact person’s email address

• Will be shown on printed copy

• Will be data captured


Risk-Based Capital

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Texas Chapter IASA


All RBC FormulasAll RBC Formulas

No RBC permitted practices allowed.

No changing of formulas, factors, or adjusting of action levels.



• ACA Fee RBC Ratio Sensitivity Test

• Deducts ACA fees from TAC

• Computes RBC ratio of TAC less ACA fees to Authorized Control Level RBC



• Operational Risk

• Format different for each of the formulas

• FYI only for 2014

• No factors will be used for 2014

• Currently would not be subject to covariance calculation

Current total RBC after Covariance

+ Operational Risk

= Total RBC after Covariance

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Texas Chapter IASA


Health RBCHealth RBC

New page XR012-A

FYI onlyFor 2014


Health RBC Health RBC

• Revisions to Credit Risk

• ACA recoverables shown separately; same factor

• ACA Risk Adjustment & Risk Corridor Sensitivity Test

• 25% factor


HRBC and RRBCHRBC and RRBC

• Additional lines added to Asset Concentration

• Receivables for Securities

• Factor changed from .050 to .024

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Texas Chapter IASA


Property RBCProperty RBC

• Underwriting risk factors updated

• Annual occurrence

• Adopted underwriting risk premium factors for Line 4 (ex-cat factors), PR018A

• Still FYI page

• Instructions for PR026 – Catastrophe Risk Charge

• Expands upon instructions in footnotes

• Attestation for catastrophe modeling

• Modeling used for RBC catastrophe same as used internally

• If exceptions, must disclose and explain why



• Schedule P catastrophe amts

• Instructions for clarity added as footnotes

24A & 28A - Only includelosses from eventsincluded on the US catastrophe list posted by the Cat Risk Subgroupavailable on website ornumbered and labeled US by PCS as hurricane, tropical storm, orearthquake.

24B & 28B - Only includelosses from eventsincluded on the non-US catastrophe list posted by the Cat Risk Subgroupavailable on website ornumbered and labeledNon-US by PCS as hurricane, tropical storm, or earthquake.



• New FYI PR003A that uses RBC After Covariance including Catastrophic Risk to calculate affiliated risk

• Also new FYI PR004A to summarize affiliated risk with catastrophic numbers included

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Texas Chapter IASA


Life RBC & Fraternal RBCLife RBC & Fraternal RBC

• Interest Rate Risk and Market Risk (Alternative)

• Only to collect information, at this time

• Companies to include description of proprietary generator used, calibration criteria and number of scenarios

• AAA scenario required for companies with reserves of $1b or more and admitted assets > $10b; optional for other companies


Life RBC & Fraternal RBCLife RBC & Fraternal RBC

• AVR limited for inclusion in Total Adjusted Capital

• Only AVR not used in asset adequacy testing

• Not readily apparent reporting format; noted in instructions and as footnote at bottom of page


Other Accounting Updates

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Texas Chapter IASA


Adopted Accounting ChangesAdopted Accounting Changes

• Preamble, Appendix D, Issue Paper 99

• AICPA SOPs no longer reviewed for statutory accounting; not considered authoritative accounting guidance

• Add reference to original SSAP and currentauthoritative guidance on face of each Issue Paper

• SSAPs No. 3 – Changes/Corrections & No. 68 –Business Combinations

• Merger footnote clarification

• SSAP No. 16R – EDP Equip & Software

• Disclosure of Capitalization


Adopted Accounting ChangesAdopted Accounting Changes

• SSAP No. 86 – Derivatives

• Adopts ASU 2013-10 with modifications

• Reconciliation of DB to balance sheet

• SSAP No. 97 – Investments in Subs…..

• Clarification to decision tree

• SSAP No. 104R – Share-Based Payments

• Equity based payments to non-employees

• Adopts GGAP fair value with modifications

• Adopted in 2013, but effective December 31, 2014


Exposed ItemsExposed Items

• Investment Classification Review

• Discussion topics and prioritization

• Issue Paper 149

• Revisions to SSAP No. 40 – Real Estate and SSAP No. 48 – Joint Ventures, Partnerships & Limited Liability Companies

• Wholly-Owned Single Real Estate Property in an LLC

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Texas Chapter IASA


Exposed at August MeetingExposed at August Meeting

• SSAP No. 1 – Disclosure of Accounting Policies, Risk and Uncertainties, and Other Disclosures and SSAP No. 4 – Asset and Nonadmitted Assets

• Restricted assets clarification

• Restricted assets does not mean nonadmitted assets

• SSAP No. 41 – Surplus Notes

• Comments on revising thresholds

• SSAP No. 54 – Individual and Group Accident & Health Contracts

• Medicare Advantage and Medicare Part D Risk Adjustment Premium Receivables and Payables



• SSAP No. 55 – Unpaid Claims, Losses and LAE

• Extra contractual obligations & bad faith lawsuits

• SSAP No. 56 – Separate Accounts

• Disclosure clarifications

• SSAP No. 57 – Title Insurance

• New premium disclosure categories

• SSAP No. 62R - Reinsurance

• Asbestos & Pollution Reinsurance Reporting Exception

• SSAP No. 69 – Statement of Cash Flows

• Treatment of non-cash items in the Cash-Flow Statements



• SSAP No. 101 – Income Taxes

• Clarification of income tax footnote

• SSAP No. 104R – Share-Based Payments

• Adopt ASU 2014-12

• Appendix A

• Updates to allow the 2012 Group Long-Term Disability Table

• Appendix C

• Health Actuarial Guideline XLVII

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Texas Chapter IASA


QuestionsQuestions

• Connie Jasper Woodroof

• NAIC Liaison

• 800.373.3366 ext 85761

• [email protected]

Texas Chapter IASA · • Examples of “roll-forward” included as an Appendix ... StoneRiver, Inc. 9 Texas Chapter IASA ... • Updates to allow the 2012 Group Long-Term Disability

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