Comment period ending 3/17: Disclosures about short-duration contracts

The Statutory Accounting Principles (E) Working Group exposed revisions to disclosures related to short-duration contracts required in SSAP No. 55 Unpaid Claims, Losses, and Loss Adjustment Expenses and SSAP No. 65 Property and Casualty Contracts that incorporate certain disclosures from ASU 2015-09 Financial Services—Insurance (Topic 944): Disclosures about Short-Duration Contracts. These changes would reject, for statutory accounting, many of the new disclosures in ASU 2015-09 and would amend statutory accounting to include additional disclosures from 2015-09 not currently addressed by existing statutory accounting related to:

  • Information about significant changes in methodologies and assumptions used in calculating the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements for the most recent reporting period presented, and
  • For lines of business discounted for statutory accounting additional disclosures that include the amount of interest accretion recognized in the statement of income; and the line item(s) in the statement of income in which the interest accretion is classified.

The above disclosures would be made using the same level of aggregation used elsewhere in statutory accounting.

The comment period ends March 17, 2017.

The exposed agenda item is available on the SAPWG web page.

We encourage insurance companies to review the changes and submit any comments prior to the end of the comment period. We will continue to evaluate the proposed changes and provide insight on the final standard.

For more information on this topic, or to learn how Baker Tilly’s insurance industry specialists can help, contact our team.