Sabrina Wilson, CPA, FLMI
Global Regulatory Policy Expert
Sabrina serves as a subject matter expert for regulatory filings at Clearwater. In this role, she works with internal teams for the ongoing enhancement of NAIC reports. Sabrina has over 20 years’ of statutory accounting and reporting experience and uses her background to communicate industry best practices and comment on regulatory guidance and procedures. She also handles complex statutory accounting and analytics questions posed by our user community.
Sabrina is a certified public accountant, has earned the designation of Fellow, Life Management Institute (FLMI), and has a master’s degree in accounting and taxation from Boise State University.
Insurers have been busy preparing for the biggest NAIC regulatory change in the past 30 years. In just nine months, the biggest accounting guidance change in three decades will go into effect and it will have a significant impact on the way insurance companies report and value their investments.
Catch up on all the important investment accounting updates from the NAIC’s Spring 2024 National Meeting. Join me and the NAIC’s Robin Marcott for a live webinar taking place March 27th, where we’ll share updates, insight, and clarification into the latest NAIC initiatives and relevant updates from the Statutory Accounting Principles Working Group (SAPWG) and other meetings. Register today!
From Rules to Latitude
The NAIC’s new accounting guidance is more than just a change in reporting. It represents a shift from a prescriptive approach to a principles-based approach. Instead of following a set of rules, insurers will now have more latitude to assess the classification and risk assessment of their investments. This change places more responsibility on insurers to have a deeper understanding of the factors that go into their investment decisions.
While the deadline might seem far off, insurers have a limited amount of time to prepare for these changes. By the end of the year, insurers will need to review and reassess all D1 assets, update their security master files, make changes to the general ledger, and redo their reporting, among other things. It’s quite a substantial amount of work that needs to be done.
Assisting our Clients in Navigating Change
At Clearwater, we understand the magnitude of these changes and the importance of being proactive in helping our clients navigate this transition. We have published some very helpful white papers and blogs, and our on-demand webinars are available to help insurers understand the scope of these changes and the steps they need to take. We are also assisting our clients in gathering the necessary data elements and enhancing our system to support their needs.
We recognize that each insurer’s situation is unique, and there are various factors that can impact the timeline and complexity of these changes. However, we estimate that it will take about six months for insurers to make the necessary changes, and we are engaging with our clients in short order to ensure they have ample time to meet the deadline.
While it’s unlikely that the NAIC will push back the deadline, we are confident that with our support, our clients will be able to meet the year-end reporting requirements. While these reporting changes aren’t expected to change the risk profile of insurers, they will make risk profiles more transparent to regulators and investors.
Fortunately, we have a comprehensive, user-friendly, and informative E-Guide to help you and other insurance industry professionals understand and implement the NAIC’s Principles-Based Bond Definition project. In this 26-page E-Guide you will find:
- A detailed outline of the implications of the new regulatory changes
- Need-to-know compliance information and important deadlines
- Bond Definition flow charts
- Asset classification logic in easy-to-read tables
- Side-by-side views of new vs. old reporting lines
- Expert key-takeaways
Get your copy of the PBBD E-Guide today!
It’s prudent for insurers to start preparing now and seek assistance from Clearwater to ensure a smooth transition. This NAIC regulatory change is a significant event that will shape the way insurers report and value their investments for years to come.