2017 naic annual statement instructions – life … · ©2017 national association of insurance...

©2017 National Association of Insurance Commissioners 1

2017 NAIC ANNUAL STATEMENT INSTRUCTIONS – LIFE

OCT 2017 REVISIONS PAGE v: TABLE OF CONTENTS Revision: Correct order of two supplements in the Table of Contents Reason: VM-20 Reserves Supplement and Variable Annuities Supplement location is reversed in the

Table of Contents. PAGE 151, 152,154, 155, NOTES TO FINANCIAL STATEMENTS

157, 158 & 160: Revision: Add crosscheck information for the total lines for Notes 5F(6), 5F(8), 5G(6), 5H(6), 5H(8) and

5I(6). Correct the line description for 5G(8)c. Reason: Ensure proper detail lines included in the totals for 5F(6), 5F(8), 5G(6), 5H(6), 5H(8) and 5I(6).

Line reference for 5G(8)c should be 31to 90 Days. PAGE 203: NOTES TO FINANCIAL STATEMENTS Revision: Correct instructions for Note 14B(3) Reason: Example should have been provided on another bullet point. PAGE 297: INTEREST MAINTENANCE RESERVE Revision: Correct page number reference for Line 3. Reason: References the wrong page. PAGE 302: INTEREST MAINTENANCE RESERVE – AMORTIZATION Revision: Modify instruction for Expected Maturity Date Reason: Modifications adopted by 2017BWG were not included. PAGE 478: SCHEDULE BA, PART 3 Revision: Correct instructions for Column 1, CUSIP Identification. Reason: Revisions included in proposal 2017-03BWG for Parts 1 and 2 were not included for Part 3.

Revision changes Part 3 to match Parts 1 and 2.

©2017 National Association of Insurance Commissioners 2

PAGE 730: SUPPLEMENTAL TERM AND UNIVERSAL LIFE INSURANCE REINSURANCE EXHIBIT, PART 1 – ALL CESSIONS OF TERM AND UNIVERSAL LIFE INSURANCE WITH SECONDARY GUARANTEES

Revision: Correct letter annotation of Part 1 definitions. Reason: Should be A through H not A through G. F was included twice by mistake. PAGE 735: SUPPLEMENTAL TERM AND UNIVERSAL LIFE INSURANCE REINSURANCE

EXHIBIT, PART 2A – TRANSACTIONS SUBJECT TO PART 2 DISCLOSURE (GRANDFATHERED OR SPECIAL EXEMPTION)

Revision: Modify instructions for Column 12, Statutory Reserve Credit Taken. Reason: Modification from proposal 2017-09BWG was missing. PAGE 752: SEPARATE ACCOUNTS – JURAT PAGE Revision: Add life policy locator contact instructions. Reason: Was left out by mistake. EDITOR’S NOTE: The above changes are highlighted within the attached instructions that follow this page. Recent Blanks (E) Working Group Agenda Items (Exposure Drafts) may be viewed in detail at the following web site: www.naic.org/cmte_e_app_blanks.htm.

http://www.naic.org/cmte_e_app_blanks.htm

©1984 – 2017 National Association of Insurance Commissioners Revised 10/2017 L/H 2017 v

Page #

Annual Supplements

Supplemental Compensation Exhibit ....................................................................................................................................... 601

Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit .................................. 604

Adjustments to Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit ......... 613

Supplemental Investment Risks Interrogatories ...................................................................................................................... 616

Variable Annuities Supplement ............................................................................................................................................... 621

Schedule SIS – Stockholder Information Supplement ......................................................................................................... 623

Medicare Supplement Insurance Experience Exhibit .............................................................................................................. 625

Trusteed Surplus Statement ..................................................................................................................................................... 627

Worker’s Compensation Carve-out Supplement ..................................................................................................................... 630

Supplemental Schedule O ........................................................................................................................................................ 650

Medicare Part D Coverage Supplement ................................................................................................................................... 652

VM-20 Reserves Supplement .................................................................................................................................................. 656

Long-Term Care Insurance Experience Reporting Forms ....................................................................................................... 658

Interest Sensitive Life Insurance Products Report

Analysis of Operations By Lines of Business .................................. 672

Analysis of Increase in Reserves ...................................................... 673

Credit Insurance Experience Exhibit ....................................................................................................................................... 674

Accident and Health Policy Experience Exhibit ...................................................................................................................... 681

Analysis of Annuity Operations by Lines of Business ............................................................................................................ 687

Analysis of Increase in Annuity Reserves During the Year ..................................................................................................... 689

Actuarial Opinion Supplements

X-Factors Actuarial Opinion .............................................................................................................................. 690

Separate Accounts Funding Guaranteed Minimum Benefit Actuarial Opinion ................................................. 690

Synthetic Guaranteed Investment Contracts Actuarial Opinion ......................................................................... 690

Reasonableness of Assumptions Certification Required By Actuarial Guideline XXXV ................................. 690

Reasonableness and Consistency of Assumptions Certification Required By Actuarial Guideline XXXV ...... 691

Reasonableness of Assumptions Certification for Implied Guaranteed Rate Method Required By Actuarial Guideline XXXVI ....................................................................................................................... 691

Reasonableness and Consistency of Assumptions Certification Required By Actuarial Guideline XXXVI (Updated Average Market Value) ................................................................................................. 691

Reasonableness and Consistency of Assumptions Certification Required By Actuarial Guideline XXXVI (Updated Market Value) ................................................................................................................ 691

C-3 RBC Certifications Required Under C-3 Phase I ........................................................................................ 692

C-3 RBC Certifications Required Under C-3 Phase II ....................................................................................... 692

Actuarial Certifications Related to Annuity Nonforfetiture Ongoing Compliance ............................................ 692

Actuarial Opinion Required by Modified Guaranteed Annuity Model Regulation ............................................ 692

Actuarial Certifications Related to Hedging Required by Actuarial Guideline XLIII ....................................... 693

Financial Officer Certification Related to Clearly Defined Hedging Strategy Required by Actuarial Guideline XLIII ........................................................................................................................................... 693

Management Certification That the Valuation Reflects Management’s Intent Required by Actuarial Guideline XLIII ........................................................................................................................................... 693

Actuarial Certification Related to the Reserves Required by Actuarial Guideline XLIII .................................. 693

Actuarial Certification Related to the Use of 2011 Preferred Class Tables Required by Model Regulation Permitting the Recognition of Preferred Mortality Tables for Use in Determining Minimum Reserve Liabilities ...................................................................................................................... 693

Supplemental Health Care Exhibit ........................................................................................................................................... 694

©1984 – 2017 National Association of Insurance Commissioners L/H 2017 vi

Supplemental XXX/AXXX Reinsurance Exhibit .................................................................................................................... 728

Completing Separate Accounts Annual Statement .................................................................................................................. 747

Page #

Appendix

Bar Codes ................................................................................................................................................................................ 775

Country of Domicile Abbreviations ......................................................................................................................................... 777

Expenses .................................................................................................................................................................................. 780

EDITOR'S NOTE: Some statement pages and items are considered self-explanatory and have no instructions other than what appears on the printed statement blank.

©1984 – 2017 National Association of Insurance Commissioners Revised 10/2017 L/H 2017 151

(4) Counterparty, Jurisdiction and Fair Value (FV)

1 2 FIRST QUARTER SECOND QUARTER 3 4 5 6 7 8 9 10

Jurisdiction MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING

BALANCE MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING

BALANCE

a.. Default (Fair Value of Securities Sold/Outstanding for Which the Repo Agreement Defaulted) XXX .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................

b.. Counterparty ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................

1 2 THIRD QUARTER FOURTH QUARTER 11 12 13 14 15 16 17 18


AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty* ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................

* Counterparty and Jurisdiction Column entries used for the amounts for Columns 11 through 18 are the same as used above in Columns 2 through 10.

(5) Securities “Sold” Under Repo – Secured Borrowing

FIRST QUARTER SECOND QUARTER 1 2 3 4 5 6 7 8

MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. BACV XXX XXX XXX ............................ XXX XXX XXX ............................. b. Nonadmitted – Subset of

BACV XXX XXX XXX ............................ XXX XXX XXX ............................. c. Fair Value ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

THIRD QUARTER FOURTH QUARTER 9 10 11 12 13 14 15 16

MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE



(6) Securities Sold Under Repo – Secured Borrowing by NAIC Designation

ENDING BALANCE

1 2 3 4 5 6 7 8 NONE NAIC 1 NAIC 2 NAIC 3 NAIC 4 NAIC 5 NAIC 6 NONADMITTED

a. Bonds – BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Bonds – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. LB & SS – BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. d. LB & SS – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. e. Preferred Stock –

BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. f. Preferred Stock – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. g. Common Stock ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. h. Mortgage Loans –

BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. i. Mortgage Loans – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. j. Real Estate – BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. k. Real Estate – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. l. Derivatives – BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. m. Derivatives – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. n. Other Invested Assets –

BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. o. Other Invested Assets –

FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. p. Total Assets – BACV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. q. Total Assets – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

p=a+c+e+g+h+j+l+n q=b+d+f+g+i+k+m+o


(7) Collateral Received – Secured Borrowing


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


(8) Cash & Non-Cash Collateral Received – Secured Borrowing by NAIC Designation

ENDING BALANCE

1 2 3 4 5 6 7 8

NONE NAIC 1 NAIC 2 NAIC 3 NAIC 4 NAIC 5 NAIC 6

DOES NOT QUALIFY AS ADMITTED

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Bonds – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. LB & SS – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. d. Preferred Stock – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. e. Common Stock ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. f. Mortgage Loans – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. g. Real Estate – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. h. Derivatives – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. i. Other Invested Assets –

FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. j. Total Collateral Assets –

FV (Sum of a through i) ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

(9) Allocation of Aggregate Collateral by Remaining Contractual Maturity

FAIR

VALUE

a. Overnight and Continuous .............................

b. 30 Days or Less ............................. c. 31 to 90 Days ............................. d. > 90 Days .............................

(10) Allocation of Aggregate Collateral Reinvested by Remaining Contractual Maturity

AMORTIZED

COST FAIR

VALUE

a. 30 Days or Less ............................. ............................ b. 31 to 60 Days ............................. ............................ c. 61 to 90 Days ............................. ............................ d. 91 to 120 Days ............................. ............................ e. 121 to 180 Days ............................. ............................ f. 181 to 365 Days ............................. ............................ g. 1 to 2 Years ............................. ............................ h. 2 to 3 Years ............................. ............................ i. > 3 Years ............................. ............................

©1984 – 2017 National Association of Insurance Commissioners L/H 2017 153

(11) Liability to Return Collateral – Secured Borrowing (Total)


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash (Collateral – All) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities Collateral

(FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. THIRD QUARTER FOURTH QUARTER 9 10 11 12 13 14 15 16

MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash (Collateral – All) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities Collateral

(FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

G. Reverse Repurchase Agreements Transactions Accounted for as Secured Borrowing THIS EXACT FORMAT MUST BE USED IN THE PREPARATION OF THIS NOTE FOR THE TABLE BELOW. REPORTING ENTITIES ARE NOT PRECLUDED FROM PROVIDING CLARIFYING DISCLOSURE BEFORE OR AFTER THIS ILLUSTRATION.

REPURCHASE TRANSACTION – CASH PROVIDER – OVERVIEW OF SECURED BORROWING TRANSACTIONS (2) Type of Repo Trades Used

1 2 3 4 FIRST

QUARTER SECOND

QUARTER THIRD

QUARTER FOURTH

QUARTER

a. Bilateral (YES/NO) ............................. ............................ ............................ ............................ b. Tri-Party (YES/NO) ............................. ............................ ............................ ............................

(3) Original (Flow) & Residual Maturity


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Open – No Maturity ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Overnight ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. 2 Days to 1 Week ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. d. > 1 Week to 1 Month ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. e. > 1 Month to 3 Months ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. f. > 3 Months to 1 Year ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. g. > 1 Year ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE






AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................



AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty* ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................



MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE (5) Fair Value of Securities

Acquired Under Repo – Secured Borrowing ............................. ............................ ............................ ............................. ............................ ............................. ............................ .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE (5) Fair Value of Securities

Acquired Under Repo – Secured Borrowing ............................. ............................ ............................ ............................. ............................ ............................. ............................ .............................

(6) Securities Acquired Under Repo – Secured Borrowing by NAIC Designation

ENDING BALANCE

1 2 3 4 5 6 7 8

NONE NAIC 1 NAIC 2 NAIC 3 NAIC 4 NAIC 5 NAIC 6

DOES NOT QUALIFY AS ADMITTED

a. Bonds – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. LB & SS – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Preferred Stock – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. d. Common Stock ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. e. Mortgage Loans – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. f. Real Estate – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. g. Derivatives – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. h. Other Invested Assets –

FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. i. Total Assets – FV (Sum

of a through h) .............................

............................

............................

............................

............................

............................

............................

.............................


(7) Collateral Pledged – Secured Borrowing


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Securities (BACV) XXX XXX XXX ............................ XXX XXX XXX ............................. d. Nonadmitted Subset

(BACV) XXX XXX XXX ............................ XXX XXX XXX ............................. THIRD QUARTER FOURTH QUARTER 9 10 11 12 13 14 15 16

MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Securities (BACV) XXX XXX XXX ............................ XXX XXX XXX ............................. d. Nonadmitted Subset

(BACV) XXX XXX XXX ............................ XXX XXX XXX .............................

(8) Allocation of Aggregate Collateral Pledged by Remaining Contractual Maturity

AMORTIZED

COST FAIR

VALUE a. Overnight and

Continuous ............................. ............................ b. 30 Days or Less ............................. ............................ c. 31 to 90 Days ............................. ............................ d. > 90 Days ............................. ............................

(9) Recognized Receivable for Return of Collateral – Secured Borrowing


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE



MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


(10) Recognized Liability to Return Collateral – Secured Borrowing (Total)


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE a. Repo Securities

Sold/Acquired with Cash Collateral ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

b. Repo Securities Sold/Acquired with Securities Collateral (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE a. Repo Securities

Sold/Acquired with Cash Collateral ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

b. Repo Securities Sold/Acquired with Securities Collateral (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


H. Repurchase Agreements Transactions Accounted for as a Sale THIS EXACT FORMAT MUST BE USED IN THE PREPARATION OF THIS NOTE FOR THE TABLE BELOW. REPORTING ENTITIES ARE NOT PRECLUDED FROM PROVIDING CLARIFYING DISCLOSURE BEFORE OR AFTER THIS ILLUSTRATION.

REPURCHASE TRANSACTION – CASH TAKER – OVERVIEW OF SALE TRANSACTIONS (2) Type of Repo Trades Used

1 2 3 4 FIRST

QUARTER SECOND

QUARTER THIRD

QUARTER FOURTH

QUARTER




MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE



MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE





AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................



AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty* ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................



(5) Securities “Sold” Under Repo – Sale


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE




MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE



(6) Securities Sold Under Repo – Sale by NAIC Designation

ENDING BALANCE








(7) Proceeds Received – Sale


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Nonadmitted ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Nonadmitted ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


(8) Cash & Non-Cash Collateral Received – Sale by NAIC Designation

ENDING BALANCE


a. Bonds – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. LB & SS – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Preferred Stock – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. d. Common Stock ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. e. Mortgage Loans – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. f. Real Estate – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. g. Derivatives – FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. h. Other Invested Assets –

FV ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. i. Total Assets – FV (Sum

of a through h) .............................

............................

............................

............................

............................

............................

............................

.............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE (9) Recognized Forward Resale

Commitment ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. THIRD QUARTER FOURTH QUARTER 9 10 11 12 13 14 15 16

MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING


Commitment ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................

I. Reverse Repurchase Agreements Transactions Accounted for as a Sale THIS EXACT FORMAT MUST BE USED IN THE PREPARATION OF THIS NOTE FOR THE TABLE BELOW. REPORTING ENTITIES ARE NOT PRECLUDED FROM PROVIDING CLARIFYING DISCLOSURE BEFORE OR AFTER THIS ILLUSTRATION.

REPURCHASE TRANSACTION – CASH PROVIDER – OVERVIEW OF SALE TRANSACTIONS (2) Type of Repo Trades Used

1 2 3 4 FIRST

QUARTER SECOND

QUARTER THIRD

QUARTER FOURTH

QUARTER




MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE



MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE






AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................



AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE


b.. Counterparty* ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... ......................... ............................................. .................... .......................... ......................... ......................... ......................... ......................... .......................... ......................... .........................


(5) Securities Acquired Under Repo – Sale


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE




MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE




(6) Securities Acquired Under Repo – Sale by NAIC Designation

ENDING BALANCE








(7) Proceeds Provided – Sale


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Securities (BACV) XXX XXX XXX ............................ XXX XXX XXX ............................. d. Nonadmitted Subset XXX XXX XXX ............................ XXX XXX XXX .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING

BALANCE

a. Cash ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. b. Securities (FV) ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. c. Securities (BACV) XXX XXX XXX ............................ XXX XXX XXX ............................. d. Nonadmitted Subset XXX XXX XXX ............................ XXX XXX XXX .............................


MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING


Commitment ............................. ............................ ............................ ............................ ............................ ............................ ............................ ............................. THIRD QUARTER FOURTH QUARTER 9 10 11 12 13 14 15 16

MINIMUM MAXIMUM

AVERAGE DAILY

BALANCE ENDING


AVERAGE DAILY

BALANCE ENDING


Commitment ............................. ............................ ............................ ............................ ............................ ............................ ............................ .............................


B. Assessments

Describe the nature of any assessments that could have a material financial effect, by type of assessment, and state the estimate of the liability, identifying whether the corresponding liability has been recognized under SSAP No. 35R—Guaranty Fund and Other Assessments, a liability has not been recognized as the obligating event has not yet occurred, or indicate that an estimate cannot be made.

For assessments with liabilities recognized under SSAP No. 35R—Guaranty Fund and Other Assessments, disclose the amounts of the recognized liabilities, any related asset for premium tax credits or policy surcharges, the periods over which the assessments are expected to be paid, and the period over which the recorded premium tax offsets or policy surcharges are expected to be realized.

Disclose assets recognized from paid and accrued premium tax offsets and policy surcharges, and include a reconciliation of assets recognized within the previous year’s annual statement to the assets recognized in the current year’s annual statement. The reconciliation shall reflect, in aggregate, each component of the increase and decrease in paid and accrued premium tax offsets and policy surcharges, including the amount charged off.

The financial statements shall disclose the following related to guaranty fund liabilities and assets related to assessments from insolvencies of entities that wrote long-term care contracts.

The discount rate applied as of the current reporting date (determined in accordance with SSAP

No. 35R—Guaranty Fund and Other Assessments);

The following disclosures shall be by insolvency:

The undiscounted and discounted amount of the guaranty fund assessments and related assets;

The number of jurisdictions for which the long-term care guaranty fund assessments payables were discounted and the number of jurisdictions for which asset recoverables were discounted;

Identify the ranges of years used to discount the assets and the range of years used to discount the

liabilities (e.g., 2-10, 5-20);

The weighted average numbers of years of the discounting time period for long-term care guaranty fund assessment liabilities; and

The weighted average number of years of the discounting time period for the asset recoverables.

Disclosures shall be made in accordance with SSAP No. 5R—Liabilities, Contingencies and Impairments of Assets when there is at least a reasonable possibility that the impairment of an asset from premium tax offsets or policy surcharges may have been incurred.

C. Gain Contingencies

Describe the nature of any gain contingencies. Gain contingencies are not recognized in a reporting entity’s financial statements except as provided under SSAP No. 5R—Liabilities, Contingencies and Impairments of Assets. If subsequent to the balance sheet date but prior to the issuance of financial statements, the gain is realized, disclose the nature of the gain contingency.


D. Claims Related Extra Contractual Obligation and Bad Faith Losses Stemming from Lawsuits

SSAP No. 55—Unpaid Claims, Losses and Loss Adjustment Expenses requires that claims related extra contractual obligations losses and bad faith losses shall be included in losses. For claims related extra contractual obligations losses and bad faith losses stemming from lawsuits, disclose the dollar amount paid (for the extra contractual and bad faith portion of the total claim amount) in the current reporting period on a direct basis. Disclose the number of claims where amounts were paid to settle claims related extra contractual obligations or bad faith claims resulting from lawsuits during the reporting period as a range.

Number of claims where amounts were paid to settle claims related extra contractual obligations or bad faith claims resulting from lawsuits during the reporting period. Please check one of the following ranges of claims:

(a) 0-25 Claims (c) 51-100 Claims (e) More than 500 Claims

(b) 26-50 Claims (d) 101-500 Claims

Indicate whether claim count information is disclosed per claim or per claimant.

(f) Per Claim [ ]

(g) Per Claimant [ ]

For purposes of this disclosure, the following are not considered extra contractual obligations:

a) Attorneys’ fees, unless a part of other extra contractual obligations lawsuits;

b) Costs and payments resulting from arbitration and external review determinations;

c) Interest payments made as required under prompt-payment requirements; and

d) Claim settlements within the lifetime policy benefit limits.

E. Joint and Several Liabilities

Disclose the following information for each joint and several liability arrangements accounted for under SSAP No. 5R—Liabilities, Contingencies and Impairments of Assets. If co-obligors are related parties, disclosure requirements in SSAP No. 25—Affiliates and Other Related Parties also apply.

The nature of the arrangement, including:

How the liability arose.

The relationship with co-obligors.

The terms and conditions of the arrangements.

The total outstanding amount under the arrangement, which shall not be reduced by the effect of any amounts that may be recoverable from other entities.

The carrying amount, if any, of the entity’s liability and the carrying amount of a receivable recognized, if any.

The nature of any recourse provisions that would enable recovery from other entities of the amounts paid, including any limitations on the amounts that might be recovered.

In the period the liability is initially recognized and measured or in a period the measurement changes significantly:

The corresponding entry.

Where the entry was recorded in the financial statements.


The block is big enough to exceed the materiality threshold.

In order to calculate the IMR amortization associated with the reinsurance of the liability, it is first necessary to determine the IMR amortization from past, present and hypothetical asset sales of assets allocable to the block of business.

IMR Amortization

Asset ($ million)

Liability ($ million)

Year

Past (included in

P28 C1)

Present (included in

P28 C2)

Future

Total

Total (included in

P28 C3) 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

.383

.310

.231

.144

.050

.261

.570

.618

.677

.743

.808

.772

.630

.469

.291

.101

.101

.191

.155

.116

.072

.025

0.745 1.071 1.004 0.937 0.865 0.833 0.772 0.630 0.469 0.291 0.101

-0.745 -1.071 -1.004 -0.937 -0.865 -0.833 -0.772 -0.630 -0.469 -0.291 -0.101

TOTAL 1.118 5.940 0.660 7.718 -7.718

The IMR amortization associated with the liability is displayed in the last column of the above table and it is simply the complement of the IMR amortization associated with the past, present and hypothetical future assets sales. The liability amortization should be entered in Column 3 of the IMR Amortization Worksheet of the Annual Statement of the ceding company. By definition the size of the interest-rate related gain is the total transferred to the IMR, -$7.718 million, which should be included on Line 3 of the IMR worksheet of the ceding company as well as on the Aggregate Write-ins for Deductions on the Summary of Operations and Analysis of Operations by Lines of Business.

Reinsurance Assumed

“Assuming Company” means here the counterparty to the transactions described above for the ceding company.

The assuming company must set up an IMR liability adjustment of the same magnitude but complementary to the adjustment recorded by the ceding company, subject to the following requirements:

1. Where the assuming company is required to set up a deferred profit liability or deferred loss asset

and reflects zero gain/(loss) at treaty date, e.g., as for assumption reinsurance, the assuming company must not set up an IMR liability adjustment. Regardless, for non-economic transactions with an affiliate, the assuming company must set up the IMR liability adjustment.

2. The assuming company may offset a positive IMR adjustment, but not below zero, with any

excess of policyholder reserves initially established by the assuming company over their re-computed values using maximum valuation interest rates based on the original issue dates of the reinsured policies.

3. The assuming company must increase a negative IMR adjustment, but not above zero, with any

shortfall of policyholder reserves initially established by the assuming company over their re-computed values using maximum valuation interest rates based on the original issue dates of the reinsured policies.


To determine the offset of Item 2 or 3 above, the company would need to calculate policyholder reserves on both the reported and minimum bases as of each valuation date. In lieu of this, a reporting entity may determine the offset as of the treaty effective date, express this offset as a percentage of the IMR adjustment and then apply this same percentage reduction or increase to the IMR adjustment at all subsequent valuation dates. However, whichever method is used for the particular treaty must be consistently applied at all valuation dates.

In the case of subsequent reinsurance, the retroceding reporting entity has an IMR adjustment net of the offset of Item 2 or 3 above, whereas, the IMR transferred over is gross of this offset. The new reinsurer would determine its own adjustment following Item 2 or 3 above.

Upon recapture or commutation of a reinsurance arrangement where the effective date of the original arrangement was January 1, 1999 or later, the reinsurer must follow the IMR rules for reinsurance ceded and the original insurer (company recapturing the business) must follow the IMR rules for reinsurance assumed, as set forth above, for the portion of business recaptured. Otherwise, no IMR adjustment is made.

Upon reinsurance assumed, recaptured or commuted from an alien insurer (i.e. not subject to IMR), an IMR liability adjustment is required only where the assuming company, or any of its affiliates, ever held the business and subsequently reinsured the business effective January 1, 1999 or later, and currently holds an unamortized IMR liability adjustment for the business. In this case, the new IMR liability adjustment must be set equal to the complement of the unamortized IMR liability adjustment(s) currently held for the business by the assuming company or by its affiliates. An affiliate may choose to hold the complementary offsetting amount if it holds the applicable unamortized IMR liability adjustment, otherwise, the complementary offsetting amount must be held by the assuming company.

Market Value Adjustments

Material gains or losses resulting from market value adjustments on policies and contracts backed by assets that are valued at book/adjusted carrying value including the marginal tax impact, should be captured by the IMR and amortized in a manner consistent with the determination of the market value adjustment. A gain or loss is considered material if it is in excess of both 0.01% of liabilities and $1,000,000. The amortization schedules should be determined in a manner consistent with the determination of associated market value adjustment.

The amount recorded on Line 3 on account of reinsurance or market value adjustments should be reported on the Summary of Operations and the Analysis of Operations by Lines of Business on the Aggregate Write-ins for Deductions line.

Line 5 – Current Year’s Amortization Released to Summary of Operations

Report the amount from the Amortization Table, Line 1, Column 4. This amount should agree with Pages 4 and 6, Line 4. This amount reflects only the current year amortization of current and prior year IMR gains and losses.

Line 6 – Reserve as of December 31, Current Year

Record any positive or allowable negative balance in the liability line captioned “Interest Maintenance Reserve” on Page 3, Line 9.4 of the General Account Statement and Line 3 of the Separate Accounts Statement. A negative IMR balance may be recorded as a negative liability in either the General Account or the Separate Accounts Statement of a company only to the extent that it is covered or offset by a positive IMR liability in the other statement.


AMORTIZATION This supporting schedule calculates the amount of the Interest Maintenance Reserve to be amortized in each year. Column 1 – Reserve as of December 31, Prior Year

Enter the amount from Column 4 of the prior year’s schedule. Column 2 – Current Year’s Realized Capital Gains/(Losses) Transferred into the Reserve Net of Taxes

After a realized capital gain/(loss) has been identified as interest-related and an expected maturity date has been determined, the Table 1 amortization chart or seriatim method should be used.

There are two prescribed methods for calculating this amortization schedule. A company can select either the seriatim method or the grouped method for calculating IMR amortization. Although a company is not precluded from changing methods on a prospective basis, the overriding consideration is the reasonableness of the amortization. However, once a method is selected for a particular year’s capital gains, the amortization is locked in and cannot be changed (at least not without the specific approval of the commissioner).

Seriatim Method

The amount of each capital gain/(loss), net of capital gains tax, amortized in a given year using the seriatim method is the excess of the amount of income which would have been reported in that year, had the asset not been disposed of, over the amount of income which would have been reported had the asset been repurchased at its sale price. The capital gains tax associated with each gain/(loss) should be amortized in proportion to the amortization of the gain/(loss).

For mortgage-backed/asset-backed securities, use an amortization schedule developed using the anticipated future cash flows of the security sold consistent with the prepayment assumptions that would have been used to value the security had the security been purchased at its sale price.

Grouped Method

The seriatim calculation (i.e., on an asset by asset basis) is the desired approach. However, the seriatim approach may impose an administrative burden on some companies, therefore, any company may use the method employed by that company to amortize interest-related capital gains/(losses) among lines of business and policyholders in accordance with the investment income allocation process as approved by the state insurance department. Alternatively, a company may use a standard “simplified” method by which the capital gains/(losses), net of capital gains tax, are grouped according to the number of calendar years to expected maturity. The groupings will be in bands of five (5) calendar years, except that investments with one (1) calendar year to expected maturity will be grouped separately from those with two (2) to five (5) calendar years to expected maturity.


Expected Maturity Date

The presence of sinking fund payments, amortization schedules, expected prepayments, and adjustable interest rates complicate the determination of the number of calendar years to expected maturity. The expected maturity date is:

For fixed income instruments with fixed contractual repayment dates and amounts (including

bonds, preferred stock, callable or convertible bonds and preferred(s), the expected maturity is defined as the contractual retirement date which produces the lowest amortization value for annual statement purposes (lowest internal rate of return or “yield to worst”). Potential retirement dates include all possible call dates, and the contractual maturity date. However, where a convertible bond or convertible preferred stock is sold while its conversion value exceeds its book/adjusted carrying value and the gain is included in IMR, the expected maturity date is defined as the next conversion date. Conversion value is defined to mean the number of shares of common stock available currently or at next conversion date, multiplied by the stock’s current market price. When the instrument’s contractual terms include scheduled sinking fund payments of fixed amounts, an additional calculation of yield to average life should be included in the analysis where average life is defined as the date at which the instrument is 50% repaid. For puttable instruments, where the exercise option rests with the investor, expected maturity is the put or maturity date that produces the highest internal rate of return. For Bond Mutual Funds – as Identified by SVO, use one calendar year to expected maturity. For SVO Identified Funds designated for systematic value, the expected maturity is the weighted-average life of the underlying bonds. For perpetual instruments, the expected maturity is 30 years from the current date.

However, where a callable bond purchased at a premium is called or sold after the expected maturity date, there should be no amortization of the call premium or interest-related gain/(loss). Similarly there should be no amortization of any interest-related gain/(loss) arising if a convertible bond or preferred stock is disposed of after the expected maturity date.

Using the grouped method, capital gains/(losses) net of capital gains tax are tabulated according to the number of calendar years to expected maturity. The groupings are:

0 calendar years to expected maturity,

1 calendar year to expected maturity,

2 to 5 calendar years to expected maturity,





over 25 calendar years to expected maturity.

“Calendar years to expected maturity” means the calendar year of maturity minus the calendar year of sale date (e.g., a bond sold in 2007 that would have matured in 2012 has five calendar years to expected maturity).

©1984 – 2017 National Association of Insurance Commissioners Investments 2017 477

Column 14 – Property Type

Use only for securities included in the following subtotal lines.

Fixed or Variable Interest Rate Investments that have the Underlying Characteristics of:

Mortgage Loans

Unaffiliated ............................................................................................................. 0999999

Affiliated................................................................................................................. 1099999

Joint Venture, Partnership or Limited Liability Company Interests that have the Underlying Characteristics of:

Real Estate

Unaffiliated ............................................................................................................. 1799999

Affiliated................................................................................................................. 1899999

Mortgage Loans

Unaffiliated ............................................................................................................. 1999999

Affiliated................................................................................................................. 2099999

For property type, use one of the following codes to indicate the primary use of the property:

OF Office

RT Retail

MU Apartment/Multifamily

IN Industrial

HC Medical/Health Care

MX Mixed Use

LO Lodging

OT Other Column 15 – Maturity Date

Use only for securities included in the following subtotal lines.

Fixed or Variable Interest Rate Investments that have the Underlying Characteristics of:

Mortgage Loans

Unaffiliated ............................................................................................................. 0999999

Affiliated................................................................................................................. 1099999

State the date the mortgage loan matures.

©1984 – 2017 National Association of Insurance Commissioners Revised 10/2017 Investments 2017 478

SCHEDULE BA – PART 3

OTHER LONG-TERM INVESTED ASSETS DISPOSED, TRANSFERRED OR REPAID DURING THE YEAR This schedule should reflect not only disposals of an entire “other invested asset”, but should also include partial disposals and amounts received during the year on investments still held, including, for example, return of capital distributions from limited partnerships. Column 1 – CUSIP Identification

This column must be completed by Life and Fraternal insurers that file Schedule BA investments with the Securities Valuation Office.

CUSIP numbers for all purchased publicly issued securities are available from the broker’s confirmation or the certificate. For private placement securities, the NAIC has created a special number called a PPN to be assigned by the Standard and Poor’s CUSIP Bureau. For foreign securities, use a CINS that is assigned by the Standard and Poor’s CUSIP Bureau: www.cusip.com/cusip/index.htm.

If no CUSIP number exists, the CUSIP field should be zero-filled.

Column 2 – Name or Description

Show name of the asset, such as the name of a limited partnership. If not applicable, show description of the asset.

Column 3 – City

For real estate partnerships or joint ventures located in the U.S., list city. If the city is unknown, indicate the county. If the investment is outside the U.S., indicate city or province. For other BA asset types, use the city of incorporation. If no city of incorporation, use the city of administrative office.

Column 4 – State

Report the two-character U.S. postal abbreviation for state for U.S. states, territories and possessions. For foreign countries, report the three-character (ISO Alpha 3) country abbreviations available in the listing in the appendix of these instructions.

Column 5 – Name of Purchaser or Nature of Disposal

Provide the name of the entity or vendor to whom the investment was sold or describe how the investment was otherwise disposed of.


A cession described above shall be reported in Part 1, even if one or more of the following circumstances exist:

1. The domiciliary regulator of the reporting entity has issued a waiver of compliance with Actuarial Guideline XLVIII–Actuarial Opinion and Memorandum Requirements for the Reinsurance of Policies Required to be Valued under Sections 6 and 7 of the NAIC Valuation of Life Insurance Policies Model Regulation (Model 830) (AG48) to the reporting entity.

2. Regulation substantially similar to Model #787 has not been adopted by the domiciliary regulator of the

reporting entity.

3. The risks ceded arise under policies that meet the definition of “Grandfathered Policies” (as defined below).

4. The risks ceded qualify for an exemption from AG48 pursuant to Section 3 thereof or from Model #787

pursuant to Section 4 thereof. Cessions shall be reported on a treaty-by-treaty basis. The terms below shall have the following definitions for the purposes of this Part 1:

A. Actuarial Method: The methodology used to determine the Required Level of Primary Security, as described in Section 6 of Model #787.

B. Covered Policies: Subject to the exemptions described in Section 4 of Model #787, Covered Policies are

those policies, other than Grandfathered Policies, of the following policy types:

1. Life insurance policies with guaranteed non-level gross premiums and/or guaranteed non-level benefits, except for flexible premium universal life insurance policies; or

2. Flexible premium universal life insurance policies with provisions resulting in the ability of a

policyholder to keep a policy in force over a secondary guarantee period.

C. Grandfathered Policies: Policies of the types described in Subsections B1 and B2 above that were:

1. Issued prior to Jan. 1, 2015; and

2. Ceded, as of Dec. 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in Section 4 of Model #787 had that section then been in effect.

D. Required Level of Primary Security: The dollar amount determined by applying the Actuarial Method to

the risks ceded with respect to Covered Policies but not more than the total reserve ceded.

E. Primary Security: The following forms of security:

1. Cash meeting the requirements of Section 3A of the NAIC Credit for Reinsurance Model Law (#785);

2. Securities listed by the Securities Valuation Office meeting the requirements of Section 3B of

Model #785, but excluding any synthetic letter of credit, contingent note, credit-linked note or other similar security that operates in a manner similar to a letter of credit, and excluding any securities issued by the ceding insurer or any of its affiliates; and


3. For security held in connection with funds withheld and modified coinsurance reinsurance arrangements:

a. Commercial loans in good standing of CM3 quality and higher;

b. Policy loans; and

c. Derivatives acquired in the normal course and used to support and hedge liabilities

pertaining to the actual risks in the policies ceded pursuant to the reinsurance arrangement.

F. Other Security: Any asset, including any asset meeting the definition of Primary Security, acceptable to

the commissioner of the ceding insurer’s domiciliary state.

G. Valuation Manual: The Valuation Manual adopted by the NAIC as described in Section 11B(1) of the NAIC Standard Valuation Law (#820), with all amendments adopted by the NAIC that are effective for the financial statement date on which credit for reinsurance is claimed.

H. VM-20: “Requirements for Principle-Based Reserves for Life Products,” including all relevant definitions,

from the Valuation Manual. Column 1 – NAIC Company Code

Provide the NAIC code of the assuming insurer. Column 2 – ID Number

Enter one of the following as appropriate for the assuming insurer reported on the schedule. See the Schedule S General Instructions for more information on these identification numbers.

Federal Employer Identification Number (FEIN) Alien Insurer Identification Number (AIIN) Certified Reinsurer Identification Number (CRIN)

Column 3 – Name of Company

Provide the name of the assuming insurer. Column 4 – Reinsurer that is Licensed, Accredited or Domiciled in Another State and that Meets Certain

Additional Statutory Accounting and RBC Requirements (YES/NO)

Enter “YES” if the reinsurance was ceded to an assuming insurer that meets the applicable requirements of Section 2A, Section 2B or Section 2C of Model #785, as adopted in the reporting entity’s state of domicile, and in addition:

1. Prepares its statutory financial statements in compliance with the NAIC Accounting Practices and

Procedures Manual, without any departures from NAIC statutory accounting practices and procedures pertaining to the admissibility or valuation of assets or liabilities that increase the assuming insurer’s reported surplus and are material enough that they would need to be disclosed in the financial statement of the assuming insurer pursuant to SSAP No. 1—Accounting Policies, Risks & Uncertainties, and Other Disclosures; and

2. Is not in a Company Action Level Event, Regulatory Action Level Event, Authorized Control

Level Event, or Mandatory Control Level Event as those terms are defined in the NAIC Risk-Based Capital (RBC) for Insurers Model Act (#312) when its RBC is calculated in accordance with the life RBC report, including overview and instructions for companies, as the same may be amended by the NAIC from time to time, without deviation.


Column 8A – “Economic Reserve” Level

State the value as of the date reported in Column 5 of:

(A) That portion of the statutory reserve credit that the reporting entity and the reporting entity’s domestic regulator have agreed must be supported by assets admissible per the NAIC Accounting Practices and Procedures Manual and that cannot be financed; or

(B) If no such agreement exists, the reserves calculated by the method required under the

Generally Accepted Accounting Principles (GAAP) for the jurisdiction in which the reinsurer’s affiliated group prepares GAAP financial statements; or

(C) If the agreement referenced in (A) does not exist and (B) does not apply, that portion of

the reserve established by the reinsurer that the reinsurer and reinsurer’s domestic regulator have agreed must be supported by assets admissible per the NAIC Accounting Practices and Procedures Manual and that cannot be financed; or

(D) If (A), (B) or (C) does not apply, the reserve required by the regulator in the jurisdiction

of the reinsurer. Column 8B – “Economic Reserve” Level (Method Used)

Indicate the method used to calculate the amount stated in Column 8A by inserting (A), (B), (C) or (D) after the stated value.

Column 9 – Primary Security

State the value as of the date reported in Column 5 of the Primary Security received by the reporting entity as collateral.

Column 10 – Other Security

State the value as of the date reported in Column 5 of all collateral that is not reported in Column 9. As of Current Year’s Annual Statement Column 11 – Statutory Reserve

State the dollar amount of the statutory reserve for the life insurance products containing guaranteed non-level gross premiums, guaranteed non-level benefits and universal life insurance policies with secondary guarantees included in the ceded reinsurance contract.

Column 12 – Statutory Reserve Credit Taken

State the dollar amount of the statutory reserve credit taken by the reporting entity (include the impact of any liability established as a result of Primary Security being less than the Required Level of Primary Security offset) for the life insurance products containing guaranteed non-level gross premiums, guaranteed non-level benefits and universal life insurance policies with secondary guarantees included in the ceded reinsurance contract as of the current annual statement date. For reserves subject to modified coinsurance, report the modified coinsurance reserve.


Column 13A – “Economic Reserve” Level

State the value as of the current annual statement date of:

(A) That portion of the statutory reserve credit that the reporting entity and the reporting entity’s domestic regulator have agreed must be supported by assets admissible per the NAIC Accounting Practices and Procedures Manual and that cannot be financed; or

(B) If no such agreement exists, the reserves calculated by the method required under the

Generally Accepted Accounting Principles (GAAP) for the jurisdiction in which the reinsurer’s affiliated group prepares GAAP financial statements; or

(C) If the agreement referenced in (A) does not exist and (B) does not apply, that portion of

the reserve established by the reinsurer that the reinsurer and reinsurer’s domestic regulator have agreed must be supported by assets admissible per the NAIC Accounting Practices and Procedures Manual and that cannot be financed; or

(D) If (A), (B) or (C) does not apply, the reserve required by the regulator in the jurisdiction

of the reinsurer. Column 13B – “Economic Reserve” Level (Method Used)

Indicate the method used to calculate the amount stated in Column 13A by inserting (A), (B), (C) or (D) after the stated value.

Column 14 – Primary Security

State the value as of the current annual statement date of the Primary Security received by the reporting entity as collateral.

Column 15 – Primary Security – Trust

State the value as of the current annual statement date of any part of the collateral reported in Column 14 that is held in trust for the benefit of the reporting entity.

Column 16 – Primary Security – Funds Withheld or Modified Coinsurance

State the value as of the current annual statement date of any part of the collateral reported in Column 14 that is held by the reporting entity on a funds withheld basis or on a modified coinsurance basis.

Column 17 – Other Security

State the value as of the current annual statement date of all collateral that is not reported in Column 14.


Statutory Statement Contact

Name & Email

Name and email address of the person responsible for preparing and filing all statutory filings with the reporting entity’s regulators and the NAIC. The person should be able to respond to questions and concerns for the Separate Accounts.

Telephone Number & Fax Number

Telephone and fax number should include area code and extension.

To be filed in electronic format only: Policyowner Relations Contact

Name

List person able to respond to calls regarding policies, premium payments, etc. on individual policies.

Address

May be a P.O. Box and the associated ZIP code.

Telephone Number

Telephone number should include area code and extension.

Email Address

Email address of the policyowner relations contact person as described above. Government Relations Contact

Name

The government relations contact represents the person the company designates to receive information from state insurance departments regarding new bulletins, company and producer licensing information, changes in departmental procedures and other general communication regarding non-financial information.

Address


Telephone Number


Email Address

Email address of the government contact person as described above.


Market Conduct Contact

Name

The market conduct contact represents the person the reporting entity designates to receive information from state insurance departments regarding market conduct activities. Such information would include (but not be limited to) data call letters, filing instructions, report cards, and inquires/questions about the reporting entity’s market conduct.

Address


Telephone Number


Email Address

Email address of the market conduct contact person as described above.

Cybersecurity Contact

Name

The cybersecurity contact represents the person the reporting entity designates to receive information on active, developing and potential cybersecurity threats from regulatory agencies.

Address


Telephone Number


Email Address

Email address of the cybersecurity contact person as described above.

Life Insurance Policy Locator Contact

Name

List person able to respond to calls regarding locating policies on lost or forgotten life insurance policies.

Address


Telephone Number


Email Address

Email address of the policy locator contact person as described above.

2017 naic annual statement instructions – life … · ©2017 national association of insurance...

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