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1.6 SEC guidance for insurance contracts
Publication date: 30 Sep 2020
us Insurance guide
The SEC has issued various guides, regulations, and policies applicable to insurance enterprises that are public business entities, including:
- Regulation S-X Article 7, Insurance Companies, which provides rules for the form and content of insurance company financial statements filed with the SEC.
- SAB Topic 5.N, Discounting by Property-Liability Insurance Companies (SAB 62), which states the SEC staff's position that discounting certain unpaid claims liabilities for short-duration contracts is acceptable in certain circumstances.
- SAB Topic 5.W, Contingency Disclosures Regarding Property-Casualty Reserves for Unpaid Claim Costs (SAB 87), which documents the SEC staff's position that contingency disclosures concerning property/casualty reserves are usually not necessary for the general uncertainties inherent in the reserve estimation process, but that these disclosures are necessary in situations involving specific uncertainties.
- SEC FRP 403, Insurance Companies, which includes SEC policies on the following financial statement disclosure requirements:
- Consolidation and supplementary segment disclosures
- Statutory accounting and applicability to Mutual Life Insurance Companies
- Investment disclosures
- Reserves for unpaid claims and claim adjustment expenses of property and casualty underwriters
- S-K 801 and S-K 802, Industry Guides, which require disclosures contained in SEC Industry Guide 6 and Guide 4 - Disclosures concerning unpaid claims and claim adjustment expenses of property/casualty underwriters. In addition, the SEC staff has required insurance company registrants to make the disclosures required by SEC Industry Guide 3 - Statistical disclosure by bank holding companies - section III - Loan Portfolio, concerning the mortgage loan portfolio of the registrant. Revisions to Guide 3 are being considered by the SEC staff; one of the revisions being considered would make the Guide applicable to all companies with significant involvement in lending and investing activities.
- SEC Financial Reporting Manual, Section 2010.6, which provides considerations related to acquisitions of blocks of insurance policies representing the acquisition of a business.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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