Statutory Accounting Principles Working Group s6

Ref #2017-36

Statutory Accounting Principles (E) Working Group

Maintenance Agenda Submission Form

Form A

Issue: Updates to INT 02-22 and INT 09-08

Check (applicable entity):

P/C Life Health

Modification of existing SSAP

New Issue or SSAP

Interpretation

Description of Issue:

INT 02-22—Accounting for the U.S. Terrorism Risk Insurance Program was created to interpret the passage of the Terrorism Risk Insurance Act of 2002 (TRIA), which created a system of shared public and private compensation for insured losses resulting from acts of terrorism, i.e., subject losses. At the time the Act was passed by U.S. Congress, it was considered a temporary Federal program under the Department of the Treasury. As such, it has been extended December 2005, December 2007 and January 2015. INT 02-22 has been updated each time that the program has been reauthorized by Congress. The proposed update to INT 02-22 will be to remove the expiration date and to update it with language that the INT is in effect as long as the TRIA program is in effect.

INT 09-08—Accounting for Loans Received Under the Federal TALF Program was created by the Federal Reserve to interpret the passage of the Term Asset-Backed Securities Loan Facility (TALF), which helped market participants meet the credit needs of households and small businesses. It supported the issuance of asset-backed securities collateralized by loans of various types to consumers and businesses of all sizes. TALF began operation in March 2009 and was closed for new loan extension against newly issued commercial mortgage-backed securities on June 30, 2010 and for new loan extensions against all other types of collateral on March 31, 2010. There are no longer any loans outstanding under the TALF program, or under any other lending facility authorized under section 13(3) of the Federal Reserve Act.

Existing Authoritative Literature:

· INT 02-22—Accounting for the U.S. Terrorism Risk Insurance Program

INT 02-22 Status

6. The Act has been extended through December 31, 2014, with the enactment of the Reauthorization Act.

· INT 09-08—Accounting for Loans Received Under the Federal TALF Program

INT 09-08 Status

11. No further discussion planned.

Activity to Date (issues previously addressed by the Working Group, Emerging Accounting Issues (E) Working Group, SEC, FASB, other State Departments of Insurance or other NAIC groups):

None

Information or issues (included in Description of Issue) not previously contemplated by the Working Group:

None

Convergence with International Financial Reporting Standards (IFRS):

None

Staff Recommendation:

Staff recommends that the Working Group move this item to the active listing, categorized as nonsubstantive and expose revisions to INT 02-22, and INT 09-08, with intent to nullify INT 09-08 and move it to Appendix H of the AP&P Manual, as detailed below.

Proposed Revisions

INT 02-22:

INT 02-22 Status

6. The Act has been extended through December 31, 2014, with the enactment of the Reauthorization Act.This Interpretation will remain in effect as long as the Terrorism Risk Insurance Act is authorized by the U.S. Congress.

INT 09-08: Proposed to incorporate the noted revision and formally nullify the INT (move to Appendix H).

INT 09-08 Status

11. No further discussion planned.

12.

13. This Interpretation is no longer in effect, as there are no more loans outstanding under the Accounting for Loans Received Under the Federal TALF Program.

Staff Review Completed by:

Fatima Sediqzad and Jake Stultz

NAIC Staff

Status:

On November 6, 2017, the Statutory Accounting Principles (E) Working Group moved this agenda item to the active listing, categorized as nonsubstantive, and exposed revisions, as detailed above, to update INT 02-22—Accounting for the U.S. Terrorism Risk Insurance Program and INT 09-08—Accounting for Loans Received Under the Federal TALF Program, with the intent to also nullify INT 09-08 and move it to Appendix H of the Accounting Practices and Procedures Manual.

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