Purposes and ProceduresManual of the NAICInvestment Analysis OfficeNAIC Securities Valuation Office andNAIC Structured Securities GroupEffective for Statements ending December 31, 2019December 31, 2019(volume/issue 19/01)
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TABLE OF CONTENTSSPECIAL NOTICE .IHOW TO CITE TO THE PURPOSES AND PROCEDURES MANUAL OF THE NAIC INVESTMENT ANALYSIS OFFICE . IIRECENT CHANGES TO THE P&P MANUAL . IIIPREVIOUSLY ADOPTED AMENDMENTS TO THE P&P MANUAL EFFECTIVE IN 2019 . VIPART ONE POLICIES OF THE NAIC VALUATION OF SECURITIES (E) TASK FORCE . 1ABOUT THE NAIC, THE VALUATION OF SECURITIES (E) TASK FORCE AND THE SVO . 2The NAIC . 2The VOS/TF and the SVO Staff . 2ABOUT THIS MANUAL. 3Purpose . 3Expression of NAIC Standards in State Law and Regulatory Processes . 3Procedures to Amend This Manual . 4Prohibition on Use of NAIC Designation in a Covenant. 8POLICIES PERTAINING TO SVO AND SSG OPERATIONS . 10Policy Objective. 10NAIC Policy Statement on Coordination of the Accounting Practices and Procedures Manual and the Purposes andProcedures Manual of the NAIC Investment Analysis Office . 10NAIC Designations Do Not Communicate Statutory Accounting or Reporting . 10Sources and Application of Statutory Accounting Guidance. 11Impact on SVO Operations . 11Communication and Coordination Between the SVO and Statutory Accounting Principles (E) Working Group Staff . 11Securities Valuation Office (SVO) . 12Ongoing SVO Operations . 12NAIC Designations . 13Other Non-Payment Risk in Securities . 13Authority to Direct Insurers on Reporting. 14Use of Generally Accepted Techniques or Methodologies . 14Structured Securities Group (SSG) . 14Ongoing SSG Operations . 15SSG Regulatory Products . 15
Main Table of ContentsOther Applicable Policies . 15Policy on Documentation and Data . 16FILING SECURITIES WITH THE SVO . 17Obligation to File Securities with the SVO. 17Who Must File . 17States May Require a Filing of Exempt or Other Transactions . 18Filing Requirements . 18THE USE OF CREDIT RATINGS OF NRSROS IN NAIC PROCESSES. 19Providing Credit Rating Services to the NAIC . 19Policy and Legal Disclosure Pertaining to the NAIC Credit Rating Provider (CRP) List . 19No Waiver/Express Reservation of Authority . 20FILING EXEMPTIONS . 21Certain Separate Accounts . 21Filing Exemption for Public Common Stock . 21Filing Exemption for Certificates of Deposit Reported as Bonds under SSAP No. 26R . 21Filing Exemption for U.S. Government Securities . 21Initial Filing Conventions and Documentation . 21SVO Publishing Conventions for Filing Exempt U.S. Government Securities . 22Other Filing Exempt U.S. Government Securities. 22Filing Requirements for U.S. Government Securities . 22Subsequent Filing . 23Filing Exemption for Direct Claims on, or Backed by Full Faith and Credit of, the United States. 23Definitions . 23Filing Exemption for Other U.S. Government Obligations . 25Policies Applicable to the Filing Exemption (FE) Process . 25Determinations . 26Directives . 26Policies Applicable to Filing Exempt (FE) Securities and Private Letter (PL) Rating Securities . 26Filing Exemption. 26Policy Considerations . 27Application of the FE Procedure to Specific Populations . 27Securities No Longer Assigned an Eligible NAIC CRP Credit Rating . 28 2019 National Association of Insurance Commissionersii
Main Table of ContentsLimitations on Use of NAIC CRP Ratings . 28NAIC DESIGNATIONS. 29Definitions . 29NAIC Designation Subscript S . 29NAIC General Interrogatory . 30NAIC PLGI . 30Monitoring of SVO-Designated Securities . 30AUDITED FINANCIAL STATEMENTS . 31General Rule on Presentation of Financial Results . 31Definitions . 31Procedure.