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#NAIC MALIST MANUAL#
#NAIC MALIST PLUS#

For more information, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.Introduces various modeling and simulation methods and paradigms that are used to explain and solve the predominant challenges facing society This information should help make for a smoother year-end process. You can find a listing of valid combinations of the designation, modifier, and symbol on NAIC’s website. Those RMBS/CMBS will now be reported as a 1.A, regardless of the insurer’s book/adjusted carrying value. The exception to this treatment applies to any residential mortgage-backed securities (RMBS) or commercial mortgage-backed securities (CMBS) with no expected loss under any selected modeling scenarios where the FE process was used and the equivalent designation would be an NAIC 1. The symbol of FM will still be reported as well.

#NAIC MALIST MANUAL#

Guidance was adopted for these securities in May and has been posted as an amendment to the Manual on NAIC’s website. The above almost completes the reporting information needed but does not cover the reporting of categories or modifiers for loan-backed and structured securities subject to modeling. To determine an appropriate modifier in these instances, view this NAIC chart.

Securities reported with an IF suffix must have an appropriate company-assigned modifier (securities with the YE suffix will have a modifier assigned in AVS+).

When securities are reported with a Z suffix, the company must self-assign an appropriate modifier.

Below is additional information that currently is not found in any written guidance but came from conversations with the IAO. Unfortunately, the above policies do not quite cover everything.

SVO-identified bond funds are reported as a 1.A.

Securities formerly reported as 5GI are now reported as 5.B.GI.

government filing exempt obligations issued and guaranteed/insured by government agencies or listed government-sponsored enterprises with a previous designation of 1 are reported as a 1.A government securities not published in AVS+ are reported as a 1.A

Certificates of deposit are reported as a 1.A.

The Valuation of Securities Task Force recognized some of the problems with the original adopted language and in July adopted the following applicable policies regarding the reporting of categories: The completed category is needed to comply with AVR reporting (for Life/Fraternal companies) and each of the risk-based capital formulas. The two statements taken together seem to imply that companies should not self-assign a modifier the modifier must come from the SVO database (AVS+), and if the database does not contain a modifier, the field is left blank for statement reporting. The confusion arises with the annual statement instructions indicating that where no modifier is available, that field should be left blank. The modifiers will appear as part of the information in the AVS+ database.

#NAIC MALIST PLUS#

The “Purposes and Procedures Manual of the NAIC Investment Analysis Office (IAO)” (Manual) states that the NAIC Designation Category is produced by the SVO (remember, the category is the designation plus the modifier).

There is some confusion on the reporting of the modifier. Shown below are the modifiers available for each of the six designations.

The combination of the designation and the modifier is called the NAIC Designation Category. The modifier teams up with the designation to provide more granularity in reporting credit quality, mostly for bond reporting. The new element is the NAIC Designation Modifier (modifier). Although those symbols might change every year, they have been used in reporting for some time. Most companies also are familiar with the reporting of the Securities Valuation Office (SVO) Administrative Symbol. It is the current numeric designation of 1 through 6, with 1 indicating the highest-quality investment and 6 indicating the lowest-quality investment. The NAIC Designation (designation) to be reported has not changed.

In the software, it appears as three separate columns, as shown below however, any printed copies of the schedules will show the information as one column. What was previously labeled as the “NAIC Designation and Administrative Symbol” column is now titled the “NAIC Designation, NAIC Designation Modifier and SVO Administrative Symbol” column.

This year-end there is some new reporting of NAIC designations in various investment schedules.