At its April 15, 2020 meeting, the National Association of Insurance Commissioners (NAIC) Statutory Accounting Principles (E) Working Group adopted four Interpretations, including INT 20-02 Extension of Ninety-Day Rule for the Impact of COVID-19. Similar to actions taken previously during significant regional catastrophes such as Superstorm Sandy, Katrina and other such events, the NAIC is granting relief from the “90-Day Rule” for admitting certain balances. This temporary relief affects the accounting for overdue balances under:
- SSAP No. 6 – Uncollected Premium Balances, Bill Receivable for Premiums, and Amounts Due from Agents and Brokers
- SSAP No. 47 – Uninsured Plans
- SSAP No. 57 – Life Contracts
- SSAP No. 65 – Property and Casualty Contracts
The relief granted is for March 31, 2020 and June 30, 2020 quarterly financial statements only. By the third quarter of 2020 (September 30, 2020 quarterly financial statements) statutory accounting will revert back to the existing accounting guidance.
In summary, any balances owed as of March 31, 2020 and June 30, 2020 for policies in effect and current prior to March 13, 2020, the date of the declaration of a national emergency concerning Coronavirus, and for policies written or renewed after March 13, 2020 will not be subject to normal “90-Day Rule” of statutory accounting and will be admissible assets.
However, existing impairment analysis remains in effect for these balances.
If you have questions on the extension or any other statutory accounting issues please contact the BSSF Property & Casualty Insurance Practice.
Disclaimer: This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.