Title Annual Statement Instructions

NAIC BLANKS (E) WORKING GROUP

Blanks Agenda Item Submission Form

DATE:02/08/2012
CONTACT PERSON:
TELEPHONE:
EMAIL ADDRESS:
ON BEHALF OF:
NAME:Michael Consedine & Steve Johnson
TITLE:
AFFILIATION:Pennsylvania Insurance Department
ADDRESS:1345 Strawberry Sq.
Harrisburg, PA 17120 / FOR NAIC USE ONLY
Agenda Item #2012-23BWG
Year2012
Changes to Existing Reporting[]
New Reporting Requirement[X]
REVIEWED FOR ACCOUNTING PRACTICES AND PROCEDURES IMPACT
No Impact[ X ]
Modifies Required Disclosure[]
DISPOSITION
[]Rejected For Public Comment
[]Referred To Another NAIC Group
[X]Received For Public Comment
[]AdoptedDate
[]RejectedDate
[]DeferredDate
[]Other (Specify)

BLANK(S) TO WHICH PROPOSAL APPLIES

[X]ANNUAL STATEMENT[X]QUARTERLY STATEMENT

[]INSTRUCTIONS[X]CROSSCHECKS[X]BLANK

[]Life and Accident & Health[]Property/Casualty[]Health

[]Separate Accounts[]Fraternal[X]Title

[]Other Specify

Anticipated Effective Date:Annual 2012

IDENTIFICATION OF ITEM(S) TO CHANGE

See details on next page.

REASON, JUSTIFICATION FOR AND/OR BENEFIT OF CHANGE**

See details on next page.

NAIC STAFF COMMENTS

Comment on Effective Reporting Date:

Other Comments:

______

**This section must be completed on all forms.Revised 6/13/2009

IDENTIFICATION OF ITEM(S) TO CHANGE

Add instruction for Certified Reinsurer Identification Number to Schedule F General Instructions.

Add line number categories for certified reinsures to Schedule F, Part 2remaining lines will be renumbered.

Add new Schedule F, Part 4 to the blank and instructions.

Add inset to annual and quarterly liability page for certified reinsures for Line 15 also modify the instructions for that line.

REASON, JUSTIFICATION FOR AND/OR BENEFIT OF CHANGE**

In 2011, the NAIC adopted revisions to the Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786). These model revisions will act to reduce reinsurance collateral requirements for non-U.S. reinsurers meeting certain criteria for financial strength and business practices that are domiciled in qualified jurisdictions. Under the revisions, credit is allowed a domestic ceding insurer for reinsurance ceded to a new class of assuming insurers, certified reinsurers. As a result, it is necessary to consider revisions to the appropriate reinsurance schedules and instructions in order to collect the relevant information with respect to these reinsurance transactions.

ANNUAL STATEMENT INSTRUCTIONS – TITLE

SCHEDULE F

Index to Schedule F

Part 1–Assumed Reinsurance

Part 2–Ceded Reinsurance

Part 3–Provision for Unauthorized Reinsurance

Part 4–Provision for Reinsurance Ceded to Certified Reinsurers

Due Date

All parts of Schedule F are to be filed with the annual statement.

Please note that Parts 1, 2,and 3 and 4 of this schedule are reported with thousands omitted.

Detail Eliminated To Conserve Space

Certified Reinsurer Identification Number

In order to report transactions involving certified reinsurers correctly, the appropriate Certified Reinsurer Identification Number (CRIN) must be included on Schedule F instead of the FEIN. The CRIN is assigned by the NAIC and is listed in the NAIC Listing of Companies. If a certified reinsurer does not appear in that publication, an application for a number should be filed with the NAIC Financial Systems and Services Department, Company Demographics Analyst. The application must be submitted along with a copy of the license or other document issued by the company’s domiciliary regulator authorizing it to transact insurance or reinsurance business, and a copy of the certification issued by the reporting entity’s domiciliary state. Documents submitted in a language other than English must be accompanied by an English Translation.

Once a number has been assigned, the applying company will be advised so that its Schedule F may be completed or corrected. Newly assigned numbers are incorporated in revised editions of the NAIC Listing of Companies, which are available semi-annually. The NAIC also provides this information to annual statement software vendors for incorporation into the software.

Detail Eliminated To Conserve Space

Determination of Authorized Status

The determination of the authorized,or unauthorized or certified status of an insurer or reinsurer listed in any part of Schedule F shall be based on the status of that insurer or reinsurer in the reporting entity’s state of domicile.

SCHEDULE F – PART 2

CEDED REINSURANCE AS OF DECEMBER 31, CURRENT YEAR

If a reporting entity has amounts reported for any of the following required groups, categories, or subcategories, it shall report the subtotal amount of the corresponding group, category, or subcategory, with the specified subtotal line number appearing in the same manner and location as the preprinted total or grand total line and number:

Group or CategoryLine Number

Total Authorized

Affiliates

U.S. Intercompany Pooling...... 0199999

U.S. Non-Pool...... 0299999

Other (Non-U.S.)...... 0399999

Total Authorized – Affiliates...... 0499999

Other U.S. Unaffiliated Insurers...... 0599999

Pools

Mandatory Pools*...... 0699999

Voluntary Pools*...... 0799999

Other Non-U.S. Insurers#...... 0899999

Total Authorized...... 0999999

Total Unauthorized

Affiliates

U.S. Intercompany Pooling...... 1099999

U.S. Non-Pool...... 1199999

Other (Non-U.S.)...... 1299999

Total Unauthorized – Affiliates...... 1399999

Other U.S. Unaffiliated Insurers...... 1499999

Pools

Mandatory Pools*...... 1599999

Voluntary Pools*...... 1699999

Total Unauthorized – Other Non-U.S. Insurers#...... 1799999

Total Unauthorized...... 1899999

Total Certified

Affiliates

U.S. Intercompany Pooling...... 1999999

U.S. Non-Pool...... 2099999

Other (Non-U.S.)...... 2199999

Total Unauthorized – Affiliates...... 2299999

Other U.S. Unaffiliated Insurers (Under $100,000)...... 2399998

Other U.S. Unaffiliated Insurers...... 2399999

Pools

Mandatory Pools* @...... 2499999

Voluntary Pools* %...... 2599999

Other non-U.S. Insurers # (under $100,000)...... 2699998

Other Non-U.S. Insurers#...... 2699999

Total Certified...... 2799999

Totals...... 9999999

*Pools and Associations consisting of affiliated companies should be listed by individual company names.

#Alien Pools and Associations should be reported on Schedule F under the category “Other Non-U.S. Insurers.”

NOTE:Disclosure of the five largest provisional commission rates should exclude mandatory pools and joint underwriting associations.

Detail Eliminated To Conserve Space

SCHEDULE F – PART 4

PROVISION FOR REINSURANCE CEDED TO CERTIFIED REINSURERS

AS OF DECEMBER 31, CURRENT YEAR

Group or CategoryLine Number

Total Affiliates

U.S. Intercompany Pooling...... 0199999

U.S. Non-Pool...... 0299999

Other Non-U.S. Insurers#...... 0399999

Total Affiliates...... 0499999

Total Other U.S. Unaffiliated Insurers...... 0599999

Total Pools and Associations

Mandatory*...... 0699999

Voluntary*...... 0799999

Total Other Non-U.S. Insurers#...... 0899999

Total Affiliates and Others...... 0999999

Total Protected Cells...... 1099999

Totals...... 9999999

*Pools and Associations consisting of affiliated companies should be listed by individual company names.

# Alien Pools and Associations should be reported on Schedule F under the category “Other Non-U.S. Insurers.

Column 5Certified Reinsurer Rating (1 through 6)

Report the certified reinsurer’s rating as assigned by the ceding insurer’s domiciliary state.

Column 6Effective Date of Certified Reinsurer Rating

Report the effective date of the certified reinsurer’s rating that is applicable to the reinsurance recoverable reported on the individual line. [Note on multiple ratings/downgrades/upgrades/etc?]

Column 7Percent Collateral Required for Full Credit (0% - 100%)

Report the percentage of collateral that is required to be provided by the certified reinsurer, in accordance with the rating assigned by the ceding insurer’s domiciliary state in order for a domestic ceding insurer to receive full financial statement credit for the reinsurance ceded to the certified reinsurer, that is applicable to the reinsurance recoverable reported on the individual line.

Column 8Net Amount Recoverable from Reinsurers (Sch. F Part 3 Col. 18)

Net Amount Recoverable from Reinsurers; Part 2, Column 12 by individual certified reinsurer. Note that this amount is the Total Amount Recoverable from Reinsurers minus Miscellaneous Balances payable to the reinsurer.

Column 9Dollar Amount of Collateral Required (Col 8 x Col 7)

Report the amount of collateral that is required in order for the reporting company to receive full financial statement credit for reinsurance. (Column 8 times Column 7)

Column 10Multiple Beneficiary Trust

If the certified reinsurer utilizes a multiple beneficiary trust account for the purposes of meeting its collateral requirements as a certified reinsurer to U.S. ceding insurers, report the amounts within such trust that are applicable to the reporting entity’s reinsurance ceded to the certified reinsurer.

Column 11–Funds Held by Company Under Reinsurance Treaties

Should agree with unauthorized portion of Schedule F, Part 2, Column 13.

Column 12 –Letters of Credit

Report the dollar amount of Letters of Credit provided by the certified reinsurer and held by or on behalf of the reporting entity as security for the certified reinsurer’s reinsurance obligations.

Column 13–Letter of Credit Issuing or Confirming Bank American Bankers Association (ABA) Routing Number

Provide the issuing or confirming bank’s nine digit American Bankers Association (ABA) routing number.

For Fronted Letters of Credit, where a single bank issues a letter of credit as the fronting bank and sells to other banks undivided interests in its obligations under the credit, list the fronting bank but not the other banks participating.

For Syndicated Letters of Credit, where one bank acts as agent for a group of banks issuing the letter of credit but each participating bank is severally, not jointly, liable, leave column blank. Provide the ABA routing number for all banks in the syndicate in footnote (a).

For reinsurers providing letters of credit from multiple banks that are not part of a syndicated letter of credit, leave the column blank. Provide the ABA routing number for all of the banks in footnote (a).

The ABA routing number can be found at the following Web address:

Column 14–Letter of Credit Code

Enter “1” for single letter of credit that is not a syndicated letter of credit.

Enter “2” for syndicated letter of credit.

Enter “3” for multiple letters of credit.

Leave blank when no letter of credit exists

Column 15–Letter of Credit Issuing or Confirming Bank Name

Provide the name of the issuing or confirming banks whose ABA routing number was provided in Column 8. The name should be as shown as found on the following Web address:

For Syndicated Letters of Credit, where one bank acts as agent for a group of banks issuing the letter of credit but each participating bank is severally, not jointly, liable, enter a reference code number in this column (e.g., 0001, 0002, etc.). Provide the name of each bank in the syndicate in footnote (a).

For reinsurers providing letters of credit from multiple banks that are not part of a syndicated letter of credit ,enter a reference code number in this column (e.g., 0001, 0002, etc.). Provide the name of each bank in footnote (a).

Column 16–Other Allowed Offset Items

Report trust funds, other than those held in a multiple beneficiary trust that are reported in Column 10, and other acceptable security.

Column 18Percent of Collateral Provided for Net Recoeverables Subject to Collateral Requirements

Report the percentage of collateral provided by the certified reinsurer for obligations subject to collateral requirements. (Column 17 divided by Column 8)

Column 19Percent Credit Allowed on Net Recoverables Subject to Collateral Requirements (Col 18 / Col 7)

Report the proportion of collateral provided by the certified reinsurer as compared to the amount of collateral that is required based on its assigned rating. (Column 18 divided by Column 7)

Column 20Amount of Credit Allowed for Net Recoverables

Provision for Reinsurance with Certified Reinsurers Due to Collateral Deficiency (Column 8 times Column 19)

LIABILITIES, SURPLUS AND OTHER FUNDS

Detail Eliminated To Conserve Space

Line 15–Provision for Unauthorized Reinsurance

Should agree withSchedule F, Part 3, (Column 20, Total x 1000) plus Schedule F, Part 4, (Column 21, Total x 1000).(Note: Schedule F omits 000)

Detail Eliminated To Conserve Space

QUARTERLY STATEMENT INSTRUCTIONS – TITLE

Detail Eliminated To Conserve Space

Line 15–Provision for Unauthorized Reinsurance

See Annual Statement InstructionsSchedule F, Part 3, Column 20 and Schedule F, Part 4, Column 21.

Detail Eliminated To Conserve Space

ANNUAL STATEMENT BLANK – TITLE

SCHEDULE F - PART 4

Provision for Reinsurance Ceded to Certified Reinsurers as of December 31, Current Year (000 OMITTED)

1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / Collateral / 18 / 19 / 20 / 21
10 / 11 / 12 / Letter of Credit Issuing or Confirming Bank / 16 / 17
Federal ID Number / NAIC Company Code / Name of Reinsurer / Domiciliary Jurisdiction / Certified Reinsurer Rating (1 through 6) / Effective Date of Certified Reinsurer Rating / Percent Collateral Required for Full Credit (0% - 100%) / Net Amount Recoverable from Reinsurers (Sch. F Part 3 Col. 18) / Dollar Amount of Collateral Required (Col 8 x Col 7) / Mulitple Beneficiary Trust / Funds Held by Company Under Reinsurance Treaties / Letters of Credit / 13
American Bankers Association (ABA) Routing Number / 14
Letter of Credit Code / 15
Bank Name / Other Allowable Collateral / Total Collateral Provided (Col. 10 + 11 + 12 + 16) / Percent of Collateral Provided for Net Recoeverables Subject to Collateral Requirements(Col. 17 / Col. 8) / Percent Credit Allowed on Net Recoverables Subject to Collateral Requirements (Col 18 / Col 7) / Amount of Credit Allowed for Net Recoverables (Col. 8 x Col. 19) / Provision for Reinsurance with Certified Reinsurers (Col. 8 - Col. 20), not to exceed Column 8)
9999999Totals / XXX / XXX / XXX

Detail Eliminated To Conserve Space

ANNUAL AND QUARTERLY STATEMENT BLANK – TITLE

LIABILITIES, SURPLUS AND OTHER FUNDS

1
Current Year / 2
Prior Year
1.Known claims reserve (Part 2B, Line 3, Col. 4)...... / ...... / ......
2.Statutory premium reserve (Part 1B, Line 2.6, Col. 1)...... / ...... / ......
3.Aggregate of other reserves required by law...... / ...... / ......
4.Supplemental reserve (Part 2B, Col. 4, Line 10)...... / ...... / ......
5.Commissions, brokerage and other charges due or accrued to attorneys, agents and real estate brokers... / ...... / ......
6.Other expenses (excluding taxes, licenses and fees)...... / ...... / ......
7.Taxes, licenses and fees (excluding federal and foreign income taxes)...... / ...... / ......
8.1Current federal and foreign income taxes (including $...... on realized capital gains (losses))...... / ...... / ......
8.2Net deferred tax liability...... / ...... / ......
9.Borrowed money $…………and interest thereon $...... / ...... / ......
10.Dividends declared and unpaid...... / ...... / ......
11.Premiums and other consideration received in advance...... / ...... / ......
12.Unearned interest and real estate income received in advance...... / ...... / ......
13.Funds held by company under reinsurance treaties ...... / ...... / ......
14.Amounts withheld or retained by company for account of others...... / ...... / ......
15.Provision for unauthorized and certified ($...... ) reinsurance...... / ...... / ......
16.Net adjustment in assets and liabilities due to foreign exchange rates...... / ...... / ......
17.Drafts outstanding...... / ...... / ......
18.Payable to parent, subsidiaries and affiliates...... / ...... / ......
19.Derivatives ...... / ...... / ......
20.Payable for securities...... / ...... / ......
21.Payable for securities lending...... / ...... / ......
22.Aggregate write-ins for other liabilities......
23.Total liabilities (Lines 1 through 22)......
24.Aggregate write-ins for special surplus funds...... / ...... / ......
25.Common capital stock...... / ...... / ......
26.Preferred capital stock...... / ...... / ......
27.Aggregate write-ins for other than special surplus funds...... / ...... / ......
28.Surplus notes...... / ...... / ......
29.Gross paid in and contributed surplus...... / ...... / ......
30.Unassigned funds (surplus)...... / ...... / ......
31.Less treasury stock, at cost:
31.1..shares common (value included in Line 25 $ ...... )...... / ...... / ......
31.2..shares preferred (value included in Line 26 $...... )......
32.Surplus as regards policyholders (Lines 24 to 30 less 31) (Page 4, Line 32)......
33.Totals (Page 2, Line 28, Col. 3)
DETAILS OF WRITE-INS
0301...... / ...... / ......
0302...... / ...... / ......
0303...... / ...... / ......
0398.Summary of remaining write-ins for Line 3 from overflow page...... / ...... / ......
0399.Totals (Lines 0301 through 0303 plus 0398) (Line 3 above)
2201...... / ...... / ......
2202...... / ...... / ......
2203...... / ...... / ......
2298.Summary of remaining write-ins for Line 22 from overflow page...... / ...... / ......
2299.Totals (Lines 2201 through 2203 plus 2298) (Line 22 above)
2401...... / ...... / ......
2402...... / ...... / ......
2403...... / ...... / ......
2498.Summary of remaining write-ins for Line 24 from overflow page...... / ...... / ......
2499.Totals (Lines 2401 through 2403 plus 2498) (Line 24 above)
2701...... / ...... / ......
2702...... / ...... / ......
2703...... / ...... / ......
2798.Summary of remaining write-ins for Line 27 from overflow page...... / ...... / ......
2799.Totals (Lines 2701 through 2703 plus 2798) (Line 27 above)

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