We know it’s crunch time and you’re extremely busy with your year-end filings. We don’t want you to forget an important , but often misunderstood topic – Reinsurance! Taking time to evaluate your reinsurance agreements is a critical step in your annual statement filing and we’re here to help. Let’s do a refresh on current topics:
- Evaluate all your company’s current reinsurance agreements and verify that state regulatory filing requirements have been met. This compliance housekeeping step could save you additional review and inquiry during on-site examinations or audits.
- Keep current with industry changes and updates via the NAIC Reinsurance Task Force and Reinsurance Working Group . Key changes have been made regarding certified reinsurance and credit for reinsurance model regulations by the Reinsurance (E) Task Force with regards to the “Bilateral Agreement Between the United States of America and the European Union on Prudential Measures Regarding Insurance and Reinsurance” (Covered Agreement) and the creation of a reciprocal jurisdiction. The intent of this proposal was to set up annual reporting blanks to allow companies to report reinsurance with reciprocal jurisdiction reinsurers as soon as the states enact the 2019 revisions to the Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786) and is similar to the process used to implement the certified reinsurer provision from 2011.
The current year-end 2020 items for annual statement filings include the following modifications (noted with their blank working group reference):
2020-04BWG – Modified the instruction and illustration for Note 23A – Unsecured Reinsurance Recoverable to reflect the disclosure addition for SSAP No. 62R—Property and Casualty Reinsurance.
2020-07BWG – Added new disclosure Note 23 – Reinsurance for reinsurance credit (23H – Life/Fraternal, 23E Health and 23K Property) to reflect the disclosure additions for SSAP No. 61R—Life, Deposit-Type and Accident and Health Reinsurance.
2020-09BWG – Modified the Annual Statement Instructions for Schedule F, Part 3 to reflect the factors for all uncollateralized reinsurance recoverable from unrated reinsurers being the same for authorized, unauthorized, certified, and reciprocal reinsurance.
2020-10BWG – Revised the column 10 header in the Variables Annuities Supplement blank to be Contract Level Reserves Less Cash Surrender Value. Revised the line descriptions in lines 1 through 3 in the footer and add a line for the Reserve Credit from Other Reinsurance and for Post-Reinsurance Ceded Aggregate Reserve. Adjust the instructions to correspond with changes made to the blanks as well as changes in the 2020 Valuation Manual for the new Variable Annuities Framework.
Many of the updates to Schedule F require additional attention this year and the RJIN (Reciprocal Jurisdiction Identification Number) assignments have not been completed by the NAIC. Please make note of these changes and be advised that many of the crosschecks and validations in this area may require further explanation to complete the annual statement.
For more information on what 2021 has in store for the reinsurance market, read this blog. Well, break time is over and it’s time for you to get back to your filings, just a few days to go! Good luck and don’t forget about reinsurance!