Difference between revisions of "NAIC.APPM"
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| − | + | '''Reading''': Accounting Practices and Procedures Manual, Preamble | |
| − | + | '''Author''': NAIC | |
| + | [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>] | ||
| − | == | + | {| class='wikitable' style='background-color: navajowhite; |
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| + | || '''BA Quick-Summary''': <span style="color: green;>'''NAIC Preamble'''</span> | ||
| − | + | * The NAIC Accounting Practices and Procedures Manual (APPM) provides a '''comprehensive guide to Statutory Accounting Principles''' (SAP) used by insurance companies in the United States. | |
| − | * | + | * It was codified to standardize accounting practices across states, '''ensuring consistency and comparability''' in insurers' financial statements. |
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| − | : | + | * The manual '''emphasizes principles''' such as: |
| − | + | :* ''conservatism'' | |
| − | + | :* ''consistency'' | |
| + | :* ''recognition'' | ||
| − | + | * These principles aim to maintain regulatory oversight '''focused on solvency''' and the protection of policyholders. | |
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| − | + | * It also outlines the '''differences''' between SAP and Generally Accepted Accounting Principles (GAAP) | |
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| − | | | + | |} |
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| − | + | ==Study Tips== | |
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| − | + | The year of publication for the manual changes each year but the content of the article does not. Much of the content of this reading is discussed elsewhere in the syllabus ''(materiality, for example)''. There is a only a small amount to memorize. | |
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| − | + | '''Estimated study time''': 1 hour ''(not including subsequent review time)'' | |
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| − | + | ==BattleTable== | |
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| − | + | Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are: | |
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| − | + | * <span style="color: green;">'''preparing Fin Stmts'''</span> - ''sources of information, materiality considerations'' | |
| − | + | * codification of SAP - ''reasons'' | |
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| + | : {| class="wikitable" style="width: 1000px;" | ||
|- | |- | ||
| − | | | + | ! style="width: 175px;" | reference !! style="width: 175px;" | part (a) !! style="width: 175px;" | part (b) !! style="width: 175px;" | part (c) !! part (d) |
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| − | | [https://www.battleacts6us.ca/pdf/Exam_( | + | | [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> |
| − | || | + | || '''codification of SAP''': <br> - reasons |
| − | || | + | || <span style="color: green;">'''preparing Fin Stmts:'''</span> <br> - source publications |
| − | || | + | || <span style="color: green;">'''preparing Fin Stmts:'''</span> <br> - alternate publications |
| − | || | + | || <span style="color: green;">'''preparing Fin Stmts:'''</span> <br> - materiality of errors |
| − | | | + | |} |
| − | + | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM§ion=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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| − | + | [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>] | |
==In Plain English!== | ==In Plain English!== | ||
| + | '''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. | ||
| + | * This guide is called the ''NAIC Accounting Practices and Procedures Manual'' and consists of the various SSAPs. | ||
| + | * The reasons for 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. | ||
| + | * The concepts underlying SSAPs are: | ||
| + | : - <u>conservatism</u> ''(estimates should be conservative to protect policyholders)'' | ||
| + | : - <u>consistency</u> ''(regulators need financial information that's comparable across companies)'' | ||
| + | : - <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 ''(which comprise the NAIC Accounting Practices and Procedures Manual)'' | ||
| + | : '''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 | ||
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| + | : ''(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 <u>notice</u> 5 days in advance of approval to all states where the insurer is licensed. | |
| + | * This <u>notice</u> must disclose: | ||
| + | : - description of the request | ||
| + | : - quantitative impact | ||
| + | The first quiz is regurgitation of the bullet points from above. | ||
| − | + | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM§ion=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> | |
| + | The second quiz cover the old exam questions. | ||
| − | + | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM§ion=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> | |
| − | == | + | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=APPM§ion=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> |
Latest revision as of 18:08, 25 July 2024
Reading: Accounting Practices and Procedures Manual, Preamble
Author: NAIC
BA Quick-Summary: NAIC Preamble
|
Study Tips
The year of publication for the manual changes each year but the content of the article does not. Much of the content of this reading is discussed elsewhere in the syllabus (materiality, for example). There is a only a small amount to memorize.
Estimated study time: 1 hour (not including subsequent review time)
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:
- reasonspreparing Fin Stmts:
- source publicationspreparing Fin Stmts:
- alternate publicationspreparing Fin Stmts:
- materiality of errors
Full BattleQuiz You must be logged in or this will not work.
In Plain English!
Codification Project:
- This project produced a comprehensive guide to SAP that provided a consistent and comprehensive basis of accounting and reporting.
- This guide is called the NAIC Accounting Practices and Procedures Manual and consists of the various SSAPs.
- The reasons for 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 (which comprise the NAIC Accounting Practices and Procedures Manual)
- 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.
