New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter A - Rules of General Application
Part 83 - Financial Statement Filings and Accounting Practices and Procedures
Section 83.4 - Conflicts and exceptions

Universal Citation: 11 NY Comp Codes Rules and Regs ยง 83.4

Current through Register Vol. 46, No. 39, September 25, 2024

The following are SSAPs or sections of SSAPs that conflict with provisions of the Insurance Law in whole or in part. These SSAPs or sections thereof are either not adopted, or modified as provided in this section and insurers shall follow the additional guidance, as indicated:

(a)

(1) Paragraph 6 of SSAP No. 6 "Uncollected Premium Balances, Bills Receivable for Premiums, and Amounts Due from Agents and Brokers" is adopted with the following addition:

Premium accruals pertaining to guaranteed rates in the form of annual level subscriber rates, as permitted by section 52.42(b)(3)(ii) of this Title (Regulation No. 62) for Public Health Law article 44 health maintenance organizations, integrated delivery systems, prepaid health services plans and comprehensive HIV special needs plans, meet the definition of assets in SSAP No. 4 "Assets and Nonadmitted Assets" and are admitted if evidenced by an approved contract provision or rider. In the event of the termination of a group, any premium due on such guaranteed rates shall be nonadmitted as prescribed in paragraph 9 of SSAP No. 6 or written off as prescribed in paragraph 10 of SSAP No. 6.

(2) Paragraph 9(a) of SSAP No. 6 "Uncollected Premium Balances, Bills Receivable for Premiums, and Amounts Due From Agents and Brokers" is adopted with the following addition:

Overdue premiums (either direct or indirectly due) from the United States government or any of its instrumentalities shall be admitted assets, in accordance with section 1301 (a)(6) of the Insurance Law. Instrumentalities as used herein shall also include State and local governments.

(b) The guidance prescribed in paragraph 9 of SSAP No. 101, "Income Taxes," is not adopted. A refund due from the Treasury should be collectible within a brief period after the statement date, in order to be considered an admitted asset. A balance due as a result of participation in a consolidated tax return should be paid over promptly by the parent. An open account or promissory note from the parent would not be an admissible asset, and may violate the provisions of section 1407 (a)(4) of the Insurance Law. For financial statements required to be filed for periods ending after January 1, 2012, the calculation of adjusted gross deferred tax assets as admitted assets shall be made in accordance with SSAP No. 101.

(c) Paragraph 5 of SSAP No. 19 "Furniture, Fixtures and Equipment", is adopted with the following addition:

Leasehold improvements, relating to home office space of article 43 corporations, Public Health Law article 44 health maintenance organizations, and integrated delivery systems as lessees, approved for capitalization by the superintendent prior to January 1, 2001, shall be admitted. Leasehold improvements relating to home office space of comprehensive HIV special needs plans and prepaid health service plans as lessees, approved for capitalization by the Commissioner of Health prior to January 1, 2001, shall be admitted. Effective January 1, 2001, all new leasehold improvements shall be accounted for in accordance with paragraph 5 of SSAP No. 19.

(d)

(1) Except as provided in paragraph (2) of this subdivision, paragraph 4 of SSAP No. 20, "Nonadmitted Assets", is adopted.

(2) Paragraph 4(c) of SSAP No. 20 is adopted with the following addition:

Insurance Law section 1411(f) prohibits loans to officers or directors, except as permitted under Insurance Law section 1411(h)(2).

(e) SSAP No. 22R, "Leases", is adopted with the following addition:

Leases entered into by article 43 corporations, Public Health Law article 44 health maintenance organizations, and integrated delivery systems, approved for capitalization by the superintendent prior to January 1, 2001, shall be admitted. Leases entered into by comprehensive HIV special needs plans and prepaid health service plans, approved for capitalization by the Commissioner of Health prior to January 1, 2001, shall be admitted. Effective January 1, 2001, all new leases shall be accounted for in accordance with of SSAP No. 22R.

(f)

(1) Paragraph 6 of SSAP No. 25, "Affiliates and Other Related Parties", is not adopted. Insurance Law section 1501(c) provides that the superintendent may determine upon application that any person does not, or will not upon the taking of some proposed action, control another person. 10 NYCRR 98-1.9(d) authorizes the Commissioner of Health to make a similar determination with respect to organizations with a certificate of authority pursuant to Public Health Law article 44.

(2) Paragraphs 11 and 12 of SSAP No. 25 are not adopted. Insurance Law section 4310(b) provides that certain article 43 corporations described therein may invest, in the aggregate, not more than three percent of their admitted assets in obligations, shares or other securities issued by a parent corporation which is organized as a not-for-profit entity or a corporation which is an affiliate or will be an affiliate after direct or indirect acquisition by the parent corporation. Insurance Law section 1407(a)(4) prohibits accident and health insurers and property/casualty insurers from investing in obligations, shares or other securities issued by a parent corporation or a corporation which is an affiliate or will be an affiliate after direct or indirect acquisition by the insurer. Further, loans and advances between a domestic controlled insurer and any person in its holding company system are subject to the reporting and approval thresholds prescribed in Insurance Law section 1505. Insurance Law section 1411(f) prohibits loans to officers and directors, except as permitted under Insurance Law section 1411(h)(2).

1 ACCOUNTING PRACTICES AND PROCEDURES MANUAL AS OF MARCH 2023. © Copyright 1999 - 2023 by National Association of Insurance Commissioners, Kansas City, Missouri.

(g) SSAP No. 29, "Prepaid Expenses", is not adopted. Insurance Law section 1302(a)(2) shall apply.

(h) Paragraph 5 of SSAP No. 35R, "Guaranty Fund and Other Assessments", is adopted with the following addition:

The following shall be admitted assets of article 43 corporations, Public Health Law article 44 health maintenance organizations, integrated delivery systems, prepaid health services plans, and comprehensive HIV special needs plans with or without notification of refund or payment:

(1) estimated market stabilization reinsurance or pooling recoverables under Insurance Law section 3233;

(2) estimated stop-loss recoverables under Insurance Law sections 4321-a, 4322-a, and 4327; and

(3) estimated reinsurance recoverables under the Department of Health New York State Medicaid Managed Care Reinsurance Program.

In accordance with SSAP No. 5R, amounts determined to be uncollectible, or otherwise impaired, shall be written off.

(i)

(1) For article 43 corporations and not-for-profit health maintenance organizations, integrated delivery systems, prepaid health services plans and comprehensive HIV special needs plans authorized pursuant to Public Health Law article 44, SSAP No. 40R, "Real Estate Investments", is adopted with the following addition:

In accordance with Insurance Law section 4310(l), in determining the financial condition of article 43 corporations and not-for-profit health maintenance organizations, integrated delivery systems, prepaid health service plans, and comprehensive HIV special needs plans authorized pursuant to Public Health Law article 44, real estate, including buildings, property, capital improvements and appurtenances owned and held that are utilized in the ordinary course of the business of such entities, may be valued by the corporation at either its current amortized book value or at 90 percent of its current market value, less encumbrances. Market value shall be determined by an independent appraisal undertaken annually, no earlier than September 30 of each year, by a member of the Appraisal Institute, 200 W. Madison Street, Suite 1500, Chicago, IL 60606. (website address is http://www.appraisalinstitute.org.) This option is not applicable to for-profit corporations authorized pursuant to Public Health Law article 44.

(2) Real estate "owned and held" and "utilized in the ordinary course of business" as set forth in paragraph (1) of this subdivision shall have the same definition as "property occupied by the company" as set forth in paragraph 5 of SSAP No. 40R, "Real Estate Investments."

(3) The provisions of paragraph 13 of SSAP No. 40R shall govern the independent appraisal requirement set forth in paragraph (1) of this subdivision.

(4) The election to value real estate at either its current amortized book value or at 90 percent of its current market value, less encumbrances, shall be applied to the valuation of all property not held for sale. As of any determination date, either all real estate shall be valued at current amortized book value or all real estate shall be valued at 90 percent of its current market value, less encumbrances. Changes in the statement value of real estate held under this election shall be accounted for as unrealized capital gains or losses.

(5) If an entity elects to value its real estate at 90 percent of its current market value, less encumbrances, in addition to the Schedule A filed as part of the NAIC Annual Statement Health Blank, a Supplemental Schedule A must be completed for what the current amortized book value would be if the entity had not made such an election as of the determination date. A Supplemental Schedule A is herein defined as a Schedule A submitted for informational purposes only, not intended to supersede the Schedule A filed as part of the NAIC Annual Statement Health Blank. The completed Supplemental Schedule A shall be submitted annually on or before the first day of March for article 43 corporations and on or before the first day of April for not-for-profit health maintenance organizations as a supplement to the NAIC Annual Statement Health Blank in support of the note requirement of paragraph (7) of this subdivision.

(6) Notwithstanding the valuation methodology permitted in paragraph (1) of this subdivision and the instructions of paragraph (4) of this subdivision, properties that the reporting entity has the intent to sell, or is required to sell, shall be classified as properties held for sale and carried at the lower of depreciated cost or current market value less encumbrances and estimated sales costs consistent with the requirements of paragraph 10 of SSAP No. 40R.

(7) An entity that elects to change its valuation of real estate pursuant to paragraph (1) of this subdivision shall disclose all of the following in the notes to its annual and quarterly financial statements:
(i) the current amortized book value of each property;

(ii) the current market value and 90 percent of the current market value, less encumbrances, of each property;

(iii) the determination date of the annual appraisal; and

(iv) the name and qualifications of the independent appraiser.

(8) Appraisals obtained in satisfaction of paragraph (1) of this subdivision shall be maintained in good order and shall be readily available for examination.

(j)

(1) Paragraph 6 of SSAP No. 97, "Investments in Subsidiary, Controlled, and Affiliated Entities", is not adopted. Pursuant to Insurance Law section 1501(c), the superintendent may determine upon application that any person does not, or will not upon the taking of some proposed action, control another person. 10 NYCRR 98-1.9(d) authorizes the Commissioner of Health to make a similar determination with respect to organizations with a certificate of authority pursuant to Public Health Law article 44.

(2) Paragraph 8(b)(i) of SSAP No. 97 is not adopted with respect to Public Health Law article 44 health maintenance organizations that are subsidiaries and that record goodwill as an admitted asset pursuant to subdivision (p) of this section. Investments in such entities shall be recorded based on the underlying statutory equity of the respective entity's financial statements, including an admitted asset for goodwill as provided for in subdivision (p) of this section.

(k)

(1) Paragraph 19(g) of SSAP No. 57, "Title Insurance", is not adopted. Pursuant to Insurance Law section 6404(a), a title insurance corporation may claim an admitted asset of up to five percent of its admitted assets for its investment in its title plant acquired after December 31, 1969.

(2) Appendix A-628-17(b)(iv) to SSAP No. 57 is not adopted. Insurance Law section 6405(a) provides a formula for determining the amounts to be released from the reinsurance reserve for title insurance companies. The formula differs from the requirements of the appendix to SSAP No. 57.

(l)

(1) Paragraph 24 of SSAP No. 62R, "Property and Casualty Reinsurance", is adopted with the following addition:

Insurers shall apply the additional restrictions as to admitted reinsurance premiums past due prescribed in Insurance Law section 1301(a)(6).

(2) The accounting treatment for loss portfolio transfers effective January 1, 2001 and subsequent shall follow the guidelines set forth in paragraphs 33 through 39 of SSAP No. 62R . All loss portfolio transfers effective prior to January 1, 2001 shall continue to be governed by the provisions of Part 112 of this Title (Insurance Regulation 108).

(m) Paragraph 4 of SSAP No. 64, "Offsetting and Netting of Assets and Liabilities", is adopted with the following addition:

Claims paid in error by health entities to providers may not be fully recoverable. To the extent that the claim overpayments meet the setoff conditions in SSAP No. 64, the right of offset is supported by a contractual agreement, and the overpayments are specific identifiable payments and not high-level estimates, the receivable shall be offset against the related liability. In accordance with SSAP No. 5, any amounts not reasonably expected to be recovered shall be written off. Amounts in excess of that written off that do not meet the right of offset shall be nonadmitted, as they are not available to satisfy policyholder obligations.

(n) Paragraphs 10, 11 and 14 of SSAP No. 65, "Property and Casualty Contracts", are not adopted. In accordance with Insurance Law section 4117(d), nontabular known case reserves for indemnity and medical claims may be discounted; incurred but not reported reserves and unpaid loss adjustment expenses shall not be discounted.

(o) With regard to article 43 corporations, Public Health Law article 44 health maintenance organizations, integrated delivery systems, prepaid health services plans and comprehensive HIV special needs plans, paragraph 7 of SSAP No. 68, "Business Combinations and Goodwill", is not adopted. Goodwill shall not be allowed as an admitted asset, except that goodwill recorded as an admitted asset on the books of a Public Health Law article 44 health maintenance organization, integrated delivery system, prepaid health services plan or comprehensive HIV special needs plan as of December 31, 2000 shall continue to be treated as an admitted asset on financial statements filed with the superintendent or the Commissioner of Health. Goodwill shall be written off over its useful life. The period of amortization shall not exceed 40 years.

(p) Paragraph 9 of SSAP No. 73, "Health Care Delivery Assets and Leasehold Improvements in Health Care Facilities", is adopted with the following exception: Durable medical equipment, furniture, medical equipment and fixtures, and leasehold improvements shall be depreciated utilizing a depreciation schedule no less conservative than that set forth in the latest revision of ESTIMATED USEFUL LIVES OF DEPRECIABLE HOSPITAL ASSETS (REVISED 2018 EDITION).2 The document may also be viewed at the New York State Department of Financial Services' New York City office at One State Street, New York, NY 10004. Lease improvements in health care facilities shall be amortized against net income over the shorter of their estimated useful life or the remaining life of the original lease excluding renewal or option periods, using methods detailed in SSAP No. 19.

Reproduced, with permission, from Estimated Useful Lives of Depreciable Hospital Assets, Revised 2018 Edition. Copyright 2018 by Health Forum, Inc. All right reserved. Printed with permission of Health Forum, Inc., in Chicago.

(q) SSAP No. 74, " Insurance-Linked Securities Issued through a Protected Cell", is not adopted. The Insurance Law does not permit an insurer to reduce its loss reserves by any credits other than reinsurance.

(r)

(1) Paragraphs 10, 11, 12 and 13 of SSAP No. 84, " Health Care and Government Insured Plan Receivables", pertaining to pharmaceutical rebates are adopted. Paragraph 27 of SSAP No. 84 is adopted except that prior to January 1, 2003 pharmaceutical rebates estimated by a health entity shall be admitted assets. In accordance with SSAP No. 5, amounts determined to be uncollectible, or otherwise impaired, shall be written off.

(2) Paragraphs 20, 21 and 22 of SSAP No. 84 pertaining to risk sharing receivables are adopted. Paragraph 28 of SSAP No. 84 is adopted except that prior to January 1, 2003 all unsecured risk sharing receivables from health care providers shall not be admitted. Secured shall be defined as evidenced by an executed note. In accordance with SSAP No. 5, amounts determined to be uncollectible, or otherwise impaired, shall be written off.

(s) Paragraph 25 of SSAP No. 61R, "Life, Deposit-Type and Accident and Health Reinsurance", is adopted with the following addition:

If a ceding insurer that receives credit for reinsurance by way of deduction from its reserve liability remits the associated reinsurance premiums for coverage beyond the paid-to-date of the policy, the ceding insurer may record an asset for the portion of the gross reinsurance premium that provides reinsurance coverage for the period from the next policy premium due date to the earlier of:

(1) the end of the policy year; or

(2) the next reinsurance premium due date. The asset shall be admitted as a write-in asset to the extent that the reinsurer must refund premiums to the ceding insurer in the event of either the termination of the ceded policy or the termination of the reinsurance agreement.

(t) The guidance prescribed in subparagraph 4.a. of SSAP No. 26R, "Bonds", and the third sentence of Footnote 1 of SSAP No. 97, are not adopted. However, shares of an exchange traded fund that meets the criteria set forth in section 77.2(a) of Part 77 of this Title shall be accounted for in accordance with the accounting manual, including with respect to the asset valuation reserve and interest maintenance reserve, with the exception that the book adjusted carrying value of such shares shall be set equal to fair value (and not systematic value).

(u) The guidance prescribed in paragraph 11, and Footnote 1 of SSAP 72, "Surplus and Quasi-Reorganizations", are not adopted.

** Estimated Useful Lives of Depreciable Hospital Assets/Revised 2004 Edition. Copyright 2004 by Health Forum, Inc. All rights reserved. Printed with the permission of American Hospital Publishing, Inc., in Chicago.

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