Ref# 2014-23
Statutory Accounting Principles Working Group
Maintenance Agenda Submission Form
Form A
Issue: Treatment of Non-Cash Items in the Cash Flow Statements
Check (applicable entity):
P/C
Life
Health
Modification of existing SSAP
New Issue or SSAP
Description of Issue:
NAIC staff has received information that the guidance for the statutory accounting cash flow statement is
unclear regarding the inclusion / exclusion of non-cash items. The following points highlight the
inconsistencies with the existing cash flow guidance:
1. SSAP No. 69—Statement of Cash Flow (SSAP No. 69) identifies that the cash flow statement shall
include cash, cash equivalents and short-term investments. From this direction, non-cash exchanges
(outside of short-term investments) should be excluded.
2. Annual Statement Instructions / Worksheets imply that non-cash items are captured within the cash
flow statement. (Examples include intercompany exchanges of non-cash assets or liabilities for other
noncash assets or liabilities and situations when non-cash assets (e.g., bonds) are used to settle
intercompany ceded premiums and/or commissions.) However, the Worksheets also indicate that they
are “provided to facilitate completion” of the Cash Flow Statement, and that “reporting entities need
to make adjustments to various lines consistent with their operations.”
3. The differences / inconsistencies between the statutory accounting guidance and the annual statement
instructions regarding the inclusion of cash/non-cash items, was noted when SSAP No. 69 was
initially developed (per Issue Paper No. 92), and was then subsequently identified with additional
revisions per agenda item 2002-01.
Issue Paper No. 92—Statement of Cash Flow, explicitly states: (bolded for emphasis)
1. This issue paper changes current statutory accounting to require that only cash
transactions be included in the Statement of Cash Flow. The current Annual
Statement Instructions are unclear and appear to indicate that any amount
shown as consideration would be included in the statement.
The guidance in SSAP No. 69, paragraph 2 was previously revised (agenda item 2002-01) as a result
of further confusion about the presentation of cash and noncash amounts in the cash flow statement.
The following shows the adopted revisions from agenda item 2002-01.
SSAP No. 69—Statement of Cash Flows with revisions adopted June 10, 2002:
2.
The Statement of Cash Flow shall be prepared using the direct method. Cash
from operations shall be reported consistent with the Statement of Income, excluding the
effect of current and prior year accruals. For purposes of the Statement of Cash Flow,
cash shall include short-term investments. Specific instructions for the classification of
items are provided in the Annual Statement Instructions.
© 2014 National Association of Insurance Commissioners 1
Ref# 2014-23
4. SSAP No. 69 includes disclosures for transactions considered to be investing and financing that affect
recognized assets and liabilities but do not result in cash receipts or cash payments in the period. As
the disclosure excludes non-cash items that pertain to operating activities, without inclusion of these
non-cash items in the cash flow statement, there is no current requirement to document these
activities. As an example, since reinsurance would generally be considered an “operating” activity,
under the existing guidance, bonds transferred in a reinsurance agreement would not be captured in
the disclosure.
Existing Authoritative Literature:
SSAP No. 69—Statement of Cash Flow provides the statutory accounting guidance for the cash flow
statement. Although this statement adopts a couple of GAAP pronouncements regarding the classification
(e.g. financing, investing or operating) of specific transactions, it rejects the underlying GAAP guidance
for the cash flow statement. The following GAAP standards are specifically noted as rejected:

FASB Statement No. 95, Statement of Cash Flows,

FASB Statement No. 102, Statement of Cash Flows—Exemption of Certain Enterprises and
Classification of Cash Flows from Certain Securities Acquired for Resale, an amendment of
FASB Statement No. 95, and

FASB Statement No. 104, Statement of Cash Flows—Net Reporting of Certain Cash Receipts and
Cash Payments and Classification of Cash Flows from Hedging Transactions, an amendment of
FASB Statement No. 95.
Although the statutory accounting guidance “rejects” the underlying GAAP guidance for cash flows, the
guidance in paragraph 3 of SSAP No. 69 for the disclosure of non-cash investing and financing activities
is essentially identical to the rejected GAAP guidance.
Despite the similarities between SAP and GAAP, staff believes the original GAAP guidance was
“rejected” as statutory accounting requires the cash flow statement to be completed under the direct
method and requires inclusion of short-term investments. Under GAAP, reporting entities are allowed to
utilize either the direct or indirect method, and only include cash and cash equivalents.
Activity to Date (issues previously addressed by SAPWG, Emerging Accounting Issues WG, SEC,
FASB, other State Departments of Insurance or other NAIC groups): Agenda Item 2002-01 - Cash
Flow Disclosure of Noncash Transactions, resulted in revisions to address “confusion about the
presentation of cash and noncash amounts in the Statement of Cash Flows.”
Information or issues (included in Description of Issue) not previously contemplated by the
SAPWG: None
Convergence with International Financial Reporting Standards (IFRS): IAS 7, Statement of Cash
Flows (IAS 7) is very similar to GAAP guidance in ASC 230. Although a variety of differences exists,
notable differences for statutory accounting review include:
 ASC 230 requires entities to provide a schedule reconciling net income for the period with net
cash flows from operating activities if entity follows direct method to prepare the financial
statement. (This is not currently required under statutory accounting.)
 ASC 230 provides explicit instructions on how to report interest and dividends paid/received as
operating or financing activities.
 ASC 230 requires non-cash investing and financing activities to be reported in a separate
schedule which can either be appended to statement of cash flows or included in the notes to the
© 2014 National Association of Insurance Commissioners 2
Ref# 2014-23
financial statements. (This is what is duplicated within statutory accounting.) IAS 7 has no such
requirements regarding a specific schedule summarizing noncash transactions.
Recommended Conclusion or Future Action on Issue:
In order to ensure consistent completion of the cash flow statement, staff recommends that this
agenda item be moved to the nonsubstantive active listing, with an exposure of the intent to clarify
the guidance in SSAP No. 69 and/or the Annual Statement Instructions. Explicit revisions have not
been proposed, as staff would first like to receive comments from regulators and interested parties on
what they would prefer to have reflected and what is currently reflected in Cash Flow Statements.
Depending on whether revisions are supported (and the extent of such revisions), staff suggests that
consideration also occur on whether the GAAP guidance should be reflected as “adopted with
modification” for statutory accounting. As there are elements of the statutory guidance that mirror GAAP,
identifying the areas that are adopted, and those sections that are modified, or excluded from the adoption,
may assist in understanding how the statutory accounting is intended to deviate from U.S. GAAP. The
following bullets have been identified as elements in which information is requested from both regulators
and reporting entities. Any additional information regarding the current guidance and/or the process to
complete the cash flow statement is also welcome.
 Preference for inclusion/exclusion of non-cash operating items in the cash flow statement.
 Current practice of inclusion/exclusion of non-cash operating items.
 Preference for mirroring GAAP on cash flow scope (cash & cash equivalents), or preference for
existing SAP (cash, cash equivalents & short-term investments).
 Identification of whether reporting entities follow the annual statement worksheets for completing
the cash flow statement, or whether the results of these worksheets are routinely adjusted to
reflect the scope of the SSAP (e.g., removal of non-cash items).
 Comments regarding whether a reconciliation of net income to cash (similar to what is completed
under GAAP) would provide beneficial information.
Recommending Party:
Julie Gann – July 2014
Status:
On August 16, 2014, the Statutory Accounting Principles (E) Working Group moved this item to the
substantive active listing and exposed this agenda item requesting information on the cash and non-cash
transactions currently reflected in cash flow statements and preferences on what should be included. The
Working Group also directed NAIC staff to conduct a confidential state survey to collect regulator
responses on the use of this statement.
On November 16, 2014, the Statutory Accounting Principles (E) Working Group directed NAIC staff to
draft revisions to clarify that items included in the cash flow statement should be limited to those that
involve cash (as defined in SSAP No. 69), expand the SSAP No. 69 disclosure to include non-cash
operating items, and send a referral to the Blanks (E) Working Group to incorporate instructions to the
Cash Flow Worksheets to clarify the adjustments needed to remove non-cash items.
On December 10, 2014, the Statutory Accounting Principles (E) Working Group voted, via e-vote, to
move this item from the substantive active listing to the nonsubstantive active listing (as the proposed
revisions only clarify guidance), and exposed revisions to SSAP No. 69 and the Annual Statement
Instructions in accordance with the direction from the 2014 Fall National Meeting (Nov. 16, 2014).
Proposed Revisions to SSAP No. 69 from Nov. 16, 2014 Recommendation:
1.
This statement establishes statutory accounting principles for the Statement of Cash Flow.
© 2014 National Association of Insurance Commissioners 3
Ref# 2014-23
SUMMARY CONCLUSION
2.
For purposes of the Statement of Cash Flow, cash shall include cash, cash equivalents and
short-term investments. The Statement of Cash Flow shall be prepared using the direct method and shall
only include transactions involving cash. Cash from operations shall be reported consistent with the
Statement of Income, excluding the effect of current and prior year accruals. Worksheets to facilitate
completion of the Cash Flow Statement, which necessitate adjustments for reporting-entity specific
insurance operations and for non-cash transactions, are provided in the Annual Statement Instructions.
Disclosures
3.
The financial statements shall disclose the following:
4.
a.
Transactions considered to be operating, investing and financing activities (consistent
with the classifications in the Annual Statement) that affect recognized assets or liabilities
but do not result in cash receipts or cash payments in the period (in narrative or schedule
form); and
b.
The cash and noncash aspects of the above transactions identified as operating,
investing or financing consistent with the classifications provided by the Annual
Statement Instructions. Examples of noncash operating, investing and financing
transactions include:
i.
Receiving non-cash financial assets from parent as a capital contribution.
ii.
Settling reinsurance transactions with exchange of non-cash financial assets.
iii.
Converting debt to equity;
iv.
Acquiring assets by assuming directly related liabilities, such as purchasing a
building by incurring a mortgage to the seller; and
v.
Exchanging noncash assets or liabilities for other noncash assets or liabilities.
Refer to the preamble for further discussion regarding disclosure requirements.
Relevant Literature
5.
This statement adopts FASB Emerging Issues Task Force Issue No. 95-13, Classification of Debt
Issue Costs in the Statement of Cash Flows which requires that cash payments for debt issue costs shall
be classified as a financing activity in the Statement of Cash Flow. This statement adopts with
modification ASU 2012-05, Not-For-Profit Entities: Classification of the Sale Proceeds of Donated
Financial Assets in the Statement of Cash Flows for all reporting entities. Donated assets with donorrestrictions as to the sale or use of the contributed financial assets, or cash receipts from the sale of
donated assets that are restricted as to use are not considered available to meet policyholder obligations
and are nonadmitted in accordance with SSAP No. 4—Assets and Nonadmitted Assets.
6.
FASB Statement No. 95, Statement of Cash Flows, FASB Statement No. 102, Statement of Cash
Flows—Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities
Acquired for Resale, an amendment of FASB Statement No. 95, and FASB Statement No. 104,
Statement of Cash Flows—Net Reporting of Certain Cash Receipts and Cash Payments and
Classification of Cash Flows from Hedging Transactions, an amendment of FASB Statement No. 95, are
rejected in this statement.
Effective Date and Transition
7.
This statement is effective for years beginning January 1, 2001. A change resulting from the
adoption of this statement shall be accounted for as a change in accounting principle in accordance with
SSAP No. 3—Accounting Changes and Corrections of Errors. In _(month/year –TBD)_, revisions were
© 2014 National Association of Insurance Commissioners 4
Ref# 2014-23
incorporated to clarify that only transactions involving cash shall be included in the cash flow statement
and to expand the disclosure to include non-cash operating transactions.
Proposed Revisions to Annual Statement Instructions from Nov. 16, 2014 Recommendation:
CASH FLOW
The statement of cash flow is prepared using the direct method consistent with the Summary of Operations,
excluding the effect of current and prior year accruals. All revenue, expenditures, purchases and sale transactions
involving cash should be entered gross. Pursuant to SSAP No. 69—Statement of Cash Flow, for purposes of the cash
flow statement, cash is defined to include cash, cash equivalents and short-term investments. Refer to SSAP No. 69
for accounting guidance regarding the disclosure of non-cash operating, investing and financing transactions.
The following worksheets are provided to facilitate completion of the Cash Flow Statement. The format reflects
common reporting practices. Reporting entities may need to make adjustments to various lines consistent with their
operations. For example, changes in the asset for foreign exchange rates is typically associated with the investment
portfolio and shown as an adjustment to investment income. Alternatively, the adjustment could be made to
insurance operations if appropriate. The Worksheets exclude certain non-cash activities, (e.g., change in
nonadmitted assets and change in AVR for Life and Fraternal companies), since the offset is to surplus and has no
affect on cash, but adjustments are needed to remove other non-cash transactions. While the Worksheets do not take
into account the cumulative effect of changes in accounting principles, the appropriate lines of the Cash Flow need
to be adjusted for this change. Note that the Worksheets are designed to take into account all lines of the Assets and
Liabilities, Surplus and Other Funds pages as well as the Summary of Operations.
Cash from Operations Worksheet
Ref. #
Premiums Collected Net of Reinsurance
1.1
Summary of Operations (Page 4) Lines 1 + 2 – 25, current year
______________
1.2
Assets (Page 2) Lines 15 + 16.2 (In part for amount related to earned premiums) +
16.3
(In part for experience rating and other amounts related to earned premiums),
Column 1, current year less previous year
______________
1.3
Liabilities (Page 3) Lines 8 + 9.2, current year less previous year
______________
1.4
__________________________________________________________________________
______________
1.5
Total of 1.1 – 1.2 + 1.3 + 1.4
______________
(Report on Line 1 of the Cash Flow)
Net Investment Income
2.1
Summary of Operations (Page 4) Line 3, current year
______________
2.2
Assets (Page 2) Lines 14 + 22, Column 1, current year less previous year
______________
2.3
Liabilities (Page 3) Lines 12 (In part for investment related expenses) + 16 + 20,
current year less previous year
______________
Amortization of premium from Investment Worksheet
______________
2.4
© 2014 National Association of Insurance Commissioners 5
B8 + S8 + M9 + O9
Ref# 2014-23
2.5
Accrual of discount from Investment Worksheet
B9 + S9 + M5 + O5
2.6
Depreciation expense (included in 2.1)
______________
2.7
__________________________________________________________________________
______________
2.8
Total of 2.1 – 2.2 + 2.3 + 2.4 – 2.5 + 2.6 + 2.7
______________
(Report on Line 2 of the Cash Flow)
______________
Miscellaneous Income
3.1
Summary of Operations (Page 4) Lines 5 + 6 + 8, current year
______________
3.2
Assets (Page 2) Lines 16.2 (In part for all amounts not reported in Line 1.2 above) +
16.3,
(In part for all amounts not reported in Line 1.2 above or Line 7.2 below) Column 1,
current year less previous year
______________
3.3
__________________________________________________________________________
______________
3.4
Total of 3.1 – 3.2 + 3.3
______________
(Report on Line 3 of the Cash Flow)
Benefit and Loss Related Payments
5.1
Summary of Operations (Page 4) Lines 20 – 43 – 7, current year
______________
5.2
Assets (Page 2) Line 16.1, Column 1, current year less previous year
______________
5.3
Liabilities (Page 3) Lines 1 + 2 + 4 + 6.3 + 9.1 + 9.3, current year less previous year
______________
5.4
__________________________________________________________________________
______________
5.5
Total of 5.1 + 5.2 – 5.3 + 5.4
______________
(Report on Line 5 of the Cash Flow)
Net Transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts
6.1
Summary of Operations (Page 4) Line 26, current year
______________
6.2
Liabilities (Page 3) Line 13, current year less previous year
______________
6.3
__________________________________________________________________________
______________
6.4
Total of 6.1 – 6.2 + 6.3
______________
(Report on Line 6 of the Cash Flow)
© 2014 National Association of Insurance Commissioners 6
Ref# 2014-23
Commissions, Expenses Paid and Aggregate Write-ins for Deductions
7.1
Summary of Operations (Page 4) Lines 21 + 22 + 23 + 24 + 27, current year
______________
7.2
Assets (Page 2) Lines 16.3 (In part for commissions and expense allowance due) +
17 + 19, Column 1, current year less previous year
______________
Liabilities (Page 3) Lines 10 + 11 + 12 (In part for amount not included in Lines 2.3
above; i.e., non-investment expenses) + 14 + 24.06, current year less previous year
______________
7.4
Depreciation expense (included in 7.1)
______________
7.5
__________________________________________________________________________
______________
7.6
Total of 7.1 + 7.2 – 7.3 – 7.4 + 7.5
______________
7.3
(Report on Line 7 of the Cash Flow)
Dividends Paid to Policyholders
8.1
Summary of Operations (Page 4) Line 30, current year
______________
8.2
Liabilities (Page 3) Lines 5 + 6.1 + 6.2 + 7, current year less previous year
______________
8.3
__________________________________________________________________________
______________
8.4
Total of 8.1 – 8.2 + 8.3
______________
(Report on Line 8 of the Cash Flow)
Federal and Foreign Income Taxes Paid (Recovered)
9.1
Summary of Operations and Capital and Surplus Account (Page 4) Line 32 + 40 +
tax amount included in Lines 34, 38 and 39, current year
______________
9.2
Assets (Page 2) Lines 18.1 + 18.2, Column 1, current year less previous year
______________
9.3
Liabilities (Page 3) Lines 15.1 + 15.2, current year less previous year
______________
9.4
Total of 9.1 + 9.2 – 9.3
______________
(Report on Line 9 of the Cash Flow)
Cash from Investments Worksheet
The following section provides a reconciliation of investment activity. Although non-cash items are included for
reconciliation purposes, the Statement of Cash Flow shall only include transactions involving cash. In addition to
excluding the lines that are explicitly non-cash items (e.g., change in admitted assets) from what is reported in the
Statement of Cash Flow, adjustments are necessary to remove non-cash acquisitions or disposals. Cash proceeds
from investments sold, matured or repaid shall be included in line 12. Cash remitted for acquired long-term
investments is included in line 13.
Bonds
B1
Change in net admitted asset value for Bonds (Page 2)
Column 3 current less previous year
© 2014 National Association of Insurance Commissioners 7
______________
Ref# 2014-23
B2
Change in assets nonadmitted for Bonds (Page 2)
Column 2 current less previous year
B3
Sum of B1 + B2
B4
Cost of Acquired
Line 2
B5
Line 4
Line 8
Line 9
Schedule D-Verification Between Years, In part
(Report on Line 12.1 of Cash Flow)
Schedule D-Verification Between Years, In part
______________
Schedule D-Verification Between Years, In part
______________
Other amount increases/(decreases)
Include non-cash items not already included in B4 through B9
B11
______________
Accrual of Discount
Line 3
B10
Schedule D-Verification Between Years, In part for cash disposal of bonds ______________
Amortization of Premium
Line 7
B9
Unrealized Valuation Increase (Decrease), In part
Total Foreign Exchange Change in Book/Adjusted Carrying Value, In part
Current Year’s Other-Than-Temporary Impairment, In part
______________
Consideration on Disposals
Line 6
B8
Schedule D-Verification Between Years, In part for cash acquisition of bonds
(Report on Line 13.1 of Cash Flow)
______________
Total Gain (Loss) on Disposals
Line 5
B7
______________
Calculate from Schedule D-Verification Between Years
Plus
Minus
B6
______________
Total of B4 + B5 + B6 – B7 – B8 + B9 + B10
B3 – B11
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in B10)
© 2014 National Association of Insurance Commissioners 8
______________
______________
0
Ref# 2014-23
Stocks
S1
Change in net admitted asset value for Stocks (Page 2)
Column 3 current less previous year
S2
Change in assets nonadmitted for Stocks (Page 2)
Column 2 current less previous year
S3
Sum of S1 + S2
S4
Cost of Acquired
Line 2
S5
S6
Plus
Line 4
Line 8
Minus
Line 9
Unrealized Valuation Increase (Decrease), In part
Total Foreign Exchange Change in Book/Adjusted Carrying
Value, In part
Current Year’s Other-Than-Temporary Impairment, In part
Schedule D-Verification Between Years, In part for cash disposal of stocks ______________
Schedule D-Verification Between Years, In part
(Report on Line 12.2 of Cash Flow)
______________
Schedule D-Verification Between Years, In part
______________
Schedule D-Verification Between Years, In part
______________
Accrual of Discount
Other amount increases/(decreases)
Include non-cash items not already included in S4 through S9
S11
______________
Amortization of Premium
Line 3
S10
Schedule D-Verification Between Years, In part for cash acquisition of stocks
(Report on Line 13.2 of Cash Flow)
______________
Consideration on Disposals
Line 7
S9
______________
Total Gain (Loss) on Disposals
Line 6
S8
______________
Calculate from Schedule D-Verification Between Years
Line 5
S7
______________
Total of S4 + S5 + S6 – S7 – S8 + S9 + S10
S3 – S11
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in S10)
© 2014 National Association of Insurance Commissioners 9
______________
______________
0
Ref# 2014-23
Reconciliation of Bonds and Stocks to Schedule D – Verification Between Years
Line 2, Cost of Bonds and Stocks acquired = B4 + S4
______________
Line 4, Unrealized Valuation Increase (Decrease) + Line 8, Total Foreign Exchange
Change in Book/Adjusted Carrying Value – Line 9, Current Year’s Other-ThanTemporary Impairment = B5 + S5
______________
Line 5, Total Gains (Losses) = B6 + S6
______________
Line 6, Consideration for Bonds and Stocks and Stock Disposed = B7 + S7
______________
Mortgage Loans
M1
Change in net admitted asset value for Mortgages (Page 2, Column 3, current year
less previous year)
______________
M2
Change in assets nonadmitted for Mortgages (Page 2, Column 2, current year less previous year) ______________
M3
Total of M1 + M2
______________
Schedule B – Verification Between Years
M4
Line 2
Cost of Acquired In part for cash acquisitions
M5
Line 4
Accrual of Discount
M6
(Report on Line 13.3 of Cash Flow)
______________
Plus
Minus
Line 5
Line 9
Line 10
M7
Line 6
Total Gain (Loss) on Disposals
M8
Line 7
Amount Received on Disposals In part for cash disposals
M9
Line 8
Amortization of Premium and Mortgage Interest Points and Commitment Fees
M10
Unrealized Valuation Increase (Decrease)
Total Foreign Exchange Change in Book/Adjusted Carrying Value
Current Year’s Other-Than-Temporary Impairment
______________
______________
(Report on Line 12.3 of Cash Flow) ______
______________
Other amounts increases (decreases)
Include non-cash items not already included in M4 through M9
M11
______________
Total of M4 + M5 + M6 + M7 – M8 – M9 + M10
M3 – M11
(If difference is not = 0, identify difference and add to amount(s) in
the appropriate line(s) or in M10)
______________
______________
0
Real Estate
R1
R2
Change in net admitted asset value for Real Estate (Page 2, Column 3, current year
less previous year)
______________
Change in assets nonadmitted for Real Estate (Page 2, Column 2, current year less previous year) ______________
© 2014 National Association of Insurance Commissioners 10
Ref# 2014-23
R3
Total of R1 + R2
______________
Schedule A – Verification Between Years
R4
Minus
Minus
Line 6
Line 7
Line 8
Total Foreign Exchange Change in Book/Adjusted Carrying Value
Current Year’s Other-Than-Temporary Impairment
Current Year’s Depreciation
______________
Plus
Plus
Line 2.1
Line 2.2
Line 3
Cost of Acquired In part for cash acquisitions
Cost of Additional Investments Made In part for cash investments
Current Year Change in Encumbrances In part for cash changes
______________
R5
(Report the sum of Lines 2.1, 2.2 and 3 on Line 13.4 of Cash Flow)
R6
Line 4
Total Gain (Loss) on Disposals
______________
R7
Line 5
Amounts Received on Disposals In part for cash disposals
R8
Other amounts increases (decreases)
(Report on Line 12.4 of Cash Flow) ______
Include non-cash items not already included in R4 through R7
R9
______________
Total of R4 + R5 + R6 – R7 + R8
R3 – R9
______________
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in R8)
0
Other Invested Assets
O1
Change in net admitted asset value for Other Invested Assets (Page 2)
Column 3 current less previous year
O2
______________
Change in assets nonadmitted for Other Invested Assets (Page 2)
Column 2 current less previous year
O3
______________
Total of O1 + O2
______________
Schedule BA – Verification Between Years
O4
Line 2
Cost of Acquisition In part for cash acquisitions
O5
Line 4
Accrual of Discount
______________
Plus
Minus
Line 5
Line 9
Line 10
______________
O7
Line 6
Total Gain (Loss) on Disposals
O8
Line 7
Amount Received on Disposals In part for cash disposals
O9
Line 8
Amortization of Premium and Depreciation
O6
O10
(Report on Line 13.5 of Cash Flow) ______________
Unrealized Valuation Increase (Decrease)
Total Foreign Exchange Change in Book/Adjusted Carrying Value
Current Year’s Other-Than-Temporary Impairment
______________
(Report on Line 12.5 of Cash Flow) ______
______________
Other amounts increases (decreases)
Include non-cash items not already included in O4 through O9
© 2014 National Association of Insurance Commissioners 11
______________
Ref# 2014-23
O11
Total of O4 + O5 + O6 + O7 – O8 – O9 + O10
O3 – O11
______________
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in O10)
0
Contract Loans and Premium Notes
P1
Change in net admitted asset value for Contract Loans and Premium Notes (Page 2)
Column 3 current less previous year
P2
______________
Change in assets nonadmitted for Contract Loans and Premium Notes (Page 2)
Column 2 current less previous year
______________
P3
Total of P1 + P2
______________
P4
Increase (Decrease) by Adjustment
______________
P5
Net Increase (Decrease) in Amount Paid and Received
P6
Realized Gain (Loss)
P7
Other amount increases (decreases)
(Report on Line 14 of Cash Flow) ______________
______________
Include non-cash items not already included in P4 through P6
P8
Total of P4 + P5 + P6 + P7
P3 – P8
______________
______________
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in P7)
0
Derivatives, Securities Lending Reinvested Collateral and Aggregate Write-ins for Invested Assets
W1
Change in net admitted asset value for Derivatives, Securities Lending Reinvested
Collateral and Aggregate Write-ins for Invested Assets (Page 2)
Plus
Plus
W2
Column 3
Column 3
Column 3
Line 7
Line 10
Line 11
current year less previous year
current year less previous year
current year less previous year
______________
Change in assets nonadmitted for Derivatives, Securities Lending Reinvested
Collateral and Aggregate Write-ins for Invested Assets (Page 2)
Plus
Plus
Column 2
Column 2
Column 2
Line 7
Line 10
Line 11
current year less previous year
current year less previous year
current year less previous year
______________
W3
Total of W1 + W2
______________
W4
Increase (Decrease) by Adjustment
______________
W5
Net Increase (Decrease) in Amounts Paid and Received (Report as cash from
investments misc. on Line 12.7 if amount is a decrease and Line 13.6 if amount is an
increase
______________
Realized Gain (Loss)
______________
W6
© 2014 National Association of Insurance Commissioners 12
Ref# 2014-23
W7
Other amounts increases (decreases)
Include non-cash items not already included in W4 through W6
W8
Total of W4 + W5 + W6 + W7
W3 – W8
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in W7)
______________
______________
0
Receivable (Payable) for Securities
X1
Change in net admitted asset value for Receivable for Securities
(Page 2, Column 3, current year less previous year)
X2
______________
Change in assets nonadmitted for Receivable for Securities
(Page 2, Column 2, current year less previous year)
______________
X3
Net change in Payable for Securities (Page 3, Column 1 less Column 2)
______________
X4
Total of X1 + X2 – X3 (Report absolute value as cash from investments misc. on
Line 12.7 if amount is a decrease and Line 13.6 if amount is
an increase)
______________
Reconcile Change in IMR Liability (Life and Fraternal Companies Only)
1
Change in IMR liability (Page 3, Line 9.4, current year less previous year)
______________
2
Current period amounts transferred to IMR (primarily from Form for Calculating IMR, Line 2)
______________
3
Current period amounts recognized in income (Summary of Operations, Page 4, Line 4)
______________
4
Other amount increases (decreases)
______________
5
Total of 2 – 3 + 4
______________
6
1–5
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in Line 4)
0
Reconcile Change in AVR liability (Life and Fraternal companies only)
1
Change in AVR liability (Page 3, Line 24.01, current year less previous year)
______________
2
Current period amounts transferred to AVR (Page 4, Line 44)
______________
3
Other amount increases (decreases)
______________
4
Total of 2 + 3
______________
5
1–4
(If difference is not = 0, identify differences and add to amount(s) in
the appropriate line(s) or in Line 3)
Reconcile Unrealized Capital Gains (Losses)
© 2014 National Association of Insurance Commissioners 13
0
Ref# 2014-23
1
2
Capital and Surplus Account (Page 4) Line 38 (In part excluding tax) + 39 (In part
excluding tax), current year
Increase (Decrease) by Adjustment from Investment Worksheet
(Ref. # B5 + S5 + M6 + R4 + O6 + P4 + W4)
3
5
______________
Increase (Decrease) on Cash, Cash Equivalents and Short-term Investments
(Report on Line 12.6 of Cash Flow)
4
______________
Depreciation (included in Line 2 and reported on Line 2.6 of Cash from Operations
Worksheet)
______________
______________
Total of 1 – 2 – 3 –4
(Amount should = 0, if not = 0 balance should be reported as cash from
investments misc. on Line 12.7 if amount is an increase and Line 13.6 if
amount is a decrease)
0
Reconcile Realized Capital Gains (Losses)
1
2
Summary of Operations (Page 4) Line 34, current year before transfer to IMR and
before taxes
Realized Gain (Loss) from Investment Worksheet
(Ref. # B6 + S6 + M7 + R6 + O7 + P6 + W6)
3
______________
Gain (Loss) on Cash, Cash Equivalents and Short-term Investments
(Report on Line 12.6 of Cash Flow)
4
______________
______________
Total of 1 – 2 – 3
(Amount should = 0, if not = 0 balance should be reported as cash from
investments misc. on Line 12.7 if amount is an increase and Line 13.6 if
amount is a decrease)
0
Cash from Financing Worksheet
These lines calculate Line 16 of the Cash Flow.
Cash Provided (Applied):
Surplus Notes and Capital Notes
1.1
Change in Surplus Notes – Liabilities, Surplus (Page 3) Line 32, current year less previous year
______________
1.2
Change in Capital Notes – Liabilities (Page 3) Line 24.11, current year less previous year
______________
© 2014 National Association of Insurance Commissioners 14
Ref# 2014-23
1.3
__________________________________________________________________________
______________
1.4
Total of 1.1 + 1.2 + 1.3
______________
(Report on Line 16.1 of Cash Flow)
Capital and Paid In Surplus, Less Treasury Stock
2.1
Change in Capital – Liabilities, Surplus (Page 3) Lines 29 + 30, current year less previous year
______________
2.2
Change in Paid in Surplus – Liabilities (Page 3) Line 33, current year less previous year
______________
2.3
Change in Treasury Stock – Liabilities, Surplus (Page 3) Line 36, current year less previous year ______________
2.4
Transfer from Unassigned Surplus to lines included in 2.1 or 2.2
______________
2.5
__________________________________________________________________________
______________
2.6
Total of 2.1 + 2.2 – 2.3 – 2.4 + 2.5
______________
(Report on Line 16.2 of Cash Flow)
Borrowed Money
3.1
Change in Borrowed Money – Liabilities, Surplus (Page 3) Line 22, current year less previous year _____________
3.2
__________________________________________________________________________
______________
3.3
Total of 3.1 + 3.2
______________
(Report on Line 16.3 of Cash Flow)
Net Deposits on Deposit-type Contracts and Other Liabilities
Change in Deposit-type Contracts – Liabilities, Surplus (Page 3) Line 3, current year
less previous year
______________
4.2
__________________________________________________________________________
______________
4.3
Total of 4.1 + 4.2
______________
4.1
(Report on Line 16.4 of Cash Flow)
Dividends to Stockholders
5.1
Dividends to Stockholders – Capital and Surplus Account (Page 4) Line 52
______________
5.2
Change in Dividends to Stockholders – Liabilities, Surplus (Page 3) Line 23 of
current year less previous year
______________
Total of 5.1 – 5.2
______________
5.3
(Report on Line 16.5 of Cash Flow)
© 2014 National Association of Insurance Commissioners 15
Ref# 2014-23
Other Cash Provided (Applied)
Aggregate Write-ins for Gains (Losses) to Surplus – Capital and Surplus Account
(Page 4) Lines 51.4 and 53
______________
Change in Misc. Liabilities (Page 3) Lines 17 + 18 + 19 + 21 +24.03 to 24.05 +
24.07 + 24.08 + 24.10 + 25 + 31 + 34, current year less previous year
______________
Change in Misc. Assets – Assets (Page 2) Lines 20 + 21 + 23 + 24 (In part for
amounts not included elsewhere) + 25 (In part for amounts not include elsewhere),
Column 1, current year less previous year
______________
6.4
Transfer from Unassigned Surplus to lines included in 6.2
______________
6.5
Depreciation (included on Line 7.4 of Cash from Operations Worksheet)
______________
6.6
__________________________________________________________________________
______________
6.7
Total of 6.1 + 6.2 – 6.3 – 6.4 + 6.5 + 6.6
______________
6.1
6.2
6.3
(Report of Line 16.6 of Cash Flow)
Reconcile Change in Liability in Reinsurance in Unauthorized and Certified Companies
1
2
3
Change in liability for Reinsurance in Unauthorized and Certified Companies –
Capital and Surplus Account (Page 4) Line 42
______________
Change in liability for Reinsurance in Unauthorized and Certified Companies –
Liabilities, Surplus (Page 3) Line 24.02, current year less previous year
______________
Total of 1 + 2
(Amount should = 0, if not = 0 balance should be reported as an adjustment
to the appropriate line on the Cash Flow Statement)
0
Reconcile Nonadmitted Assets
1
Capital and Surplus Account (Page 4) Line 41, current year
______________
2
Change in nonadmitted (Page 2, Column 2 Total, current year less previous year)
______________
3
Other adjustments
______________
4
Total of 1 + 2 + 3
(Amount should = 0, if not = 0, balance should be reported as cash from
financing on Line 16.6)
0
Reconcile Change in Accounting
Capital and Surplus Account, (Page 4) Line 49, current year
Allocate all amounts due to change in accounting to the appropriate section of the worksheet
© 2014 National Association of Insurance Commissioners 16
______________
Ref# 2014-23
Supplemental Disclosure of Non-cash Transactions
Report the amount of non-cash operating, investing and financing transactions consistent with the classifications
contained on the Assets and Liabilities, Surplus and Other Funds (all except Health) Liabilities, Capital and
Surplus (Health) page of the financial statement excluding amounts associated with policy or contract loans.
Refer to SSAP No. 69, Statement of Cash Flows, for accounting guidance.
Examples of non-cash investing and financing transactions include:

Converting debt to equity;

Acquiring assets by assuming directly related liabilities, such as purchasing a building by incurring a
mortgage to the seller; and


Exchanging non-cash assets or liabilities for other non-cash assets or liabilities.
Receiving non-cash financial assets from parent as a capital contribution.

Settling reinsurance transactions with exchange of non-cash financial assets.
Illustration:
The Company reported the following non-cash operating, investing and financing activities in 20___:
20.0001
20.0002
20.0003
20.0004
20.0005
Real estate acquired in satisfaction of debt
Bonds & stocks acquired in a business acquisition
Policy reserves acquired in a business acquisition
Bonds acquired from parent as a capital contribution
Remitted bonds to settle assumed reinsurance obligations
G:\DATA\Stat Acctg\1. Statutory\A. Maintenance\a. Form A\1. Active Form A's\14-23 - SAP Cash Flow - 2.doc
© 2014 National Association of Insurance Commissioners 17
Current
Year
XXX
XXX
XXX
XXX
XXX
Prior
Year
XXX
XXX
XXX
XXX
XXX