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ARTICLE · 18 MARCH 2021

NAIC – Disclaimer Does Not Affect ‘Related Party' Status

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Insurers in which a shareholder has a 10% or greater position should consider the latest guidance from state insurance regulators on variable interest entities (VIEs) and related parties.

United StatesInsurance
Daniel Rabinowitz
Daniel Rabinowitz
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Insurers in which a shareholder has a 10% or greater position should consider the latest guidance from state insurance regulators on variable interest entities (VIEs) and related parties. Even where an insurer and the shareholder have “disclaimed” affiliation, they are regarded as “related” parties for accounting purposes, according to revisions to Statement of Statutory Accounting Principles (SSAP) No. 25. Non-substantive amendments to the SSAP No. 25 guidance were adopted by videoconference on March 15 by the Statutory Accounting Principles Working Group (SAPWG) of the National Association of Insurance Commissioners (NAIC) in lieu of SAPWG's customary meeting at NAIC's Spring National Meeting. The March 15 adoption finalizes the new pronouncement on VIEs.

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