Difference between revisions of "NAIC.APPM"
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− | The CAS syllabus citation for this article is confusing. The syllabus says this is a new reading, however, it actually isn't. The year of publication for the manual changes each year but the content of the article does not. | + | || The CAS syllabus citation for this article is confusing. The syllabus says this is a new reading, however, it actually isn't. The year of publication for the manual changes each year but the content of the article does not. |
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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. | 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. |
Revision as of 23:10, 30 July 2023
Updates to this article will be done once the study kit becomes available from the CAS. (Changes are probably minor.) |
Reading: Accounting Practices and Procedures Manual, Preamble
Author: NAIC
Study Tips
The CAS syllabus citation for this article is confusing. The syllabus says this is a new reading, however, it actually isn't. 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.
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Full BattleQuiz You must be logged in or this will not work.