Fermat Capital Management’s Adam Dener represented the American Council of Life Insurers at a recent National Association of Insurance Commissioners (NAIC) public technical meeting to discuss ACLI-proposed revisions to the Statutory Accounting Principles for Working Capital Finance Investments.

Fermat Capital Management’s Adam Dener represented the American Council of Life Insurers at a recent National Association of Insurance Commissioners (NAIC) public technical meeting to discuss ACLI-proposed revisions to the Statutory Accounting Principles (SSAP) No. 105 – Working Capital Finance Investments, the NAIC standards for investment in Working Capital Finance Investment (WCFI) assets for the insurance industry.

The ACLI-suggested revisions aim to increase WCFI adoption across the life insurance industry and focus on four key areas to ease market participation in the asset class: 1) developing NAIC rating criteria for non-rated subsidiaries of investment grade obligors; 2) expanding the standards to allow NAIC-3 and NAIC-4 designated WFCI as admitted invested assets for insurance companies (the current standards only apply to NAIC-1 and NAIC-2 designated WFCIs, the only asset class to have such credit quality restrictions); 3) requiring regulators to adopt and authorize WCFI standards for insurance companies operating in their state and 4) streamlining reporting requirements for insurance companies investing in WCFIs.

The NAIC are in the process of collecting and reviewing public comments on draft revisions to SSAP No. 105 and the four ACLI-proposed changes outlined above feed into this exercise. Commenting on the process and the timeline for any changes, Adam Dener said, “We remain involved with the industry through the ALCI and committed to working with regulators to address these draft revisions that are critical to increasing adoption of the WCFI asset class within the life insurance industry.”

Statutory Accounting Principles (SSAP) No. 105 – Working Capital Finance Investments

NAIC Accounting Practices and Procedures (E) Task Force Meeting, New York, August 4, 2019 Draft Minutes