Richard Pullara
Insurance Solutions Specialist
Richard has more than 15 years of insurance investment accounting experience. He is an expert in statutory accounting and investment systems and is Clearwater’s liaison for the NAIC, NASVA, and the IASA. He has an MBA in finance from the University of Hartford and a bachelor’s in accounting from York College of Pennsylvania.
Blanks Working Group (BWG) Passes Requirements For New Electronic-Only Columns Effective 12/31/2015
On June 30, the Blanks Working Group (BWG) held a conference call to discuss changes for 2015 annual reporting. During the meeting, they passed BWG 2015-14: Addition of new electronic-only columns. This post outlines the detailed changes; for commentary on how those changes might impact your business, read this update.
BWG 2015-14 modifies the instructions for CUSIP Identification (column 1) and Description (column 2). It also requires new electronic columns for Issuer (column 31), Issue (column 32), ISIN Identification (column 34), and Capital Structure Code (column 35).
BWG 2015-14 was accepted and adopted in large part because it provides clear benefits for the SVO by making it easier for them to find more securities in data feeds. It will also improve information used for the Filing Exempt process by eliminating the unfound securities in the Credit Trading Provider Feeds as well as the Jump State Report exceptions.
BWG 2015-14 specifically states what values to report in the CUSIP field if no CUSIP exists. In addition, for the new electronic-only columns, Issuer and Issue, the proposal states the preferred sources the reporting entity is encouraged to use:
- Bloomberg
- Interactive Data Corporation (IDC)
- Thomson Reuters
- S&P/CUSIP
- Descriptions used in relevant SEC Filing or legal documentation
The Description column was also updated with encouragement to use the same entry as the Issue column.
In total, four new electronic columns were adopted, including Capital Structure Code. The Capital Structure Code will be consistent with the SVO Notching Guidelines in the Purpose and Procedures Manual of the NAIC Investments Analysis Office (P&P Manual) as:
- Senior Secured Debt
- Senior Unsecured Debt
- Senior Subordinated Debt
- Junior Subordinated Debt
- Other
It should be noted that the original proposal had an additional electronic-only column: SEDOL Code Required. However, during the conference call the NAIC removed that requirement from the adopted proposal.
In the face of these changes, insurance companies of all sizes should ask themselves:
- Do I have access to the required fields?
- Is my investment accounting system/provider proactive and prepared for this change?
- Will my company be prepared for this change by December 2015?