Difference between revisions of "NAIC.APPM"

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This reading, ''NAIC Accounting Practices and Procedures Manual'' was the result of a task force to identify, investigate and develop solutions to accounting problems faced by insurers.
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&nbsp;&nbsp;[https://www.battleacts6us.ca/vanillaforum6us/categories/naic-appm<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>]
 
&nbsp;&nbsp;[https://www.battleacts6us.ca/vanillaforum6us/categories/naic-appm<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>]
  
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==Pop Quiz==
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==Study Tips==
  
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Much of the content of this reading is discussed elsewhere in the syllabus ''(materiality, for example)''. Spend no more than 30 minutes reading the wiki article and studying the exam questions. There is a only a small amount to memorize.
  
 
==BattleTable==
 
==BattleTable==
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Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are:
 
Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are:
  
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*
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* <span style="color: green;">'''preparing Fin Stmts'''</span> - ''sources of information, materiality considerations''
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*
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* codification of SAP - ''reasons''
  
 
: {| class="wikitable" style="width: 1000px;"
 
: {| class="wikitable" style="width: 1000px;"
 
|-
 
|-
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! style="width: 175px;" | reference !! part (a) !! part (b) !! part (c) !! part (d)
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! style="width: 175px;" | reference !! style="width: 175px;" | part (a) !! style="width: 175px;" | part (b) !! style="width: 175px;" | part (c) !! part (d)
  
 
|-
 
|-
 
| [https://www.battleacts6us.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(18).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Spring #18)'''</span>
 
| [https://www.battleacts6us.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(18).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Spring #18)'''</span>
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|| '''codification of SAP''': <br> - reasons
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|| <span style="color: green;">'''preparing Fin Stmts:'''</span> <br> - source publications
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|| <span style="color: green;">'''preparing Fin Stmts:'''</span> <br> - alternate publications
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|| <span style="color: green;">'''preparing Fin Stmts:'''</span> <br> - materiality of errors
  
 
|}
 
|}
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==In Plain English!==
 
==In Plain English!==
  
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[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span>
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'''Codification Project''':
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* This project produced a comprehensive guide to SAP that provided a <u>consistent</u> and <u>comprehensive</u> basis of accounting and reporting.
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* The reasons of the codification of SAP are related to uniformity of reporting and are listed in part (a) of the '''2015.Spring''' exam problem.
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'''Statements of Statutory Accounting Principles (SSAPs)''':
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* These principles constitute an accounting basis for the preparation of SAP statements where state regulations don't exist.
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* The concepts underlying SSAPs are:
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: &nbsp;&nbsp; -  <u>conservatism</u> ''(estimates should be conservative to protect policyholders)''
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: &nbsp;&nbsp; - <u>consistency</u> ''(regulators need financial information that's comparable across companies)''
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: &nbsp;&nbsp; -  <u>recognition</u> ''(solvency assessments are based on the balance sheet, the income statement is secondary)''
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'''Hierarchy of Accounting Rules''': ''Higher levels take precedence over lower levels.''
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: '''Level 1''': SSAPs
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: '''Level 2''': Emerging Accounting Issues Working Group
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: '''Level 3''': NAIC Annual Statement Instructions
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: '''Level 4''': SAP Statement of Concepts
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: '''Level 5''': Sources of nonauthoritative GAAP accounting guidance & literature
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: ''(see parts (b) & (c) of the '''2015.spring''' exam problem)''
  
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==BattleCodes==
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'''Deviations from NAIC APPM ''Accounting Practices and Procedures Manual )'''''
  
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Memorize:
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* If an insurer wants to deviate from APPM or state prescribed accounting practices, the regulator must provide <u>notice</u> 5 days in advance of approval to all states where the insurer is licensed.
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* This <u>notice</u> must disclose:
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: &nbsp;&nbsp; -  description of the request
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: &nbsp;&nbsp; -  quantitative impact
  
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The first quiz is regurgitation of the bullet points from above.
  
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Conceptual:
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[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=1<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 1]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span>
  
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The second quiz cover the old exam questions.
  
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Calculational:
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[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=2<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 2]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span>
  
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==POP QUIZ ANSWERS==
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[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span>

Revision as of 00:42, 1 April 2019

This reading, NAIC Accounting Practices and Procedures Manual was the result of a task force to identify, investigate and develop solutions to accounting problems faced by insurers.

  Forum

Study Tips

Much of the content of this reading is discussed elsewhere in the syllabus (materiality, for example). Spend no more than 30 minutes reading the wiki article and studying the exam questions. There is a only a small amount to memorize.

BattleTable

Based on past exams, the main things you need to know (in rough order of importance) are:

  • preparing Fin Stmts - sources of information, materiality considerations
  • codification of SAP - reasons
reference part (a) part (b) part (c) part (d)
E (2015.Spring #18) codification of SAP:
- reasons 		preparing Fin Stmts:
- source publications 		preparing Fin Stmts:
- alternate publications 		preparing Fin Stmts:
- materiality of errors

Full BattleQuiz You must be logged in or this will not work.

  Forum

In Plain English!

Codification Project:

  • This project produced a comprehensive guide to SAP that provided a consistent and comprehensive basis of accounting and reporting.
  • The reasons of the codification of SAP are related to uniformity of reporting and are listed in part (a) of the 2015.Spring exam problem.

Statements of Statutory Accounting Principles (SSAPs):

  • These principles constitute an accounting basis for the preparation of SAP statements where state regulations don't exist.
  • The concepts underlying SSAPs are:
   - conservatism (estimates should be conservative to protect policyholders)
   - consistency (regulators need financial information that's comparable across companies)
   - recognition (solvency assessments are based on the balance sheet, the income statement is secondary)

Hierarchy of Accounting Rules: Higher levels take precedence over lower levels.

Level 1: SSAPs
Level 2: Emerging Accounting Issues Working Group
Level 3: NAIC Annual Statement Instructions
Level 4: SAP Statement of Concepts
Level 5: Sources of nonauthoritative GAAP accounting guidance & literature
(see parts (b) & (c) of the 2015.spring exam problem)

Deviations from NAIC APPM Accounting Practices and Procedures Manual )

  • If an insurer wants to deviate from APPM or state prescribed accounting practices, the regulator must provide notice 5 days in advance of approval to all states where the insurer is licensed.
  • This notice must disclose:
   - description of the request
   - quantitative impact

The first quiz is regurgitation of the bullet points from above.

mini BattleQuiz 1 You must be logged in or this will not work.

The second quiz cover the old exam questions.

mini BattleQuiz 2 You must be logged in or this will not work.

Full BattleQuiz You must be logged in or this will not work.

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