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Posted on: November 13, 2017

SCDOI issues guidance memo on application of ASU 2015-09.

ASU 2015-09 Compliance – Loss Disclosure Requirements for Short Duration Contracts

Non-public, calendar-year-end filers with annual periods beginning after December 15, 2016, are subject to the additional loss disclosure requirements imposed by ASU 2015-09, issued in May of 2015 by the FASB.  This Department has received a number of inquiries regarding the applicability of these requirements to South Carolina domiciled captive insurance companies and risk retention groups. 

These disclosures are intended “to (1) increase the decision usefulness of the information about a reporting entity’s insurance liabilities, including the nature, amount, timing, and uncertainty of cash flows related to those liabilities and the effect of those cash flows on the statement of comprehensive income, and (2) improve the comparability between reporting entities . . . .”

The Department acknowledges the following with respect to these additional disclosures:

  • that compliance with these disclosure requirements will result in additional costs to South Carolina captives and risk retention groups, as well as additional resource demands upon captive managers and other service providers;
  • that a considerable amount of the information required by these new disclosures is already available in the captives’ annual statement filings; and
  • that given the private nature and limited purpose of captives generally, the potential readership of the audited financial statements of captives with a need for enhanced “decision usefulness” of those statements is very limited. 

For the above reasons, this Department will grant written requests for a permitted practice or waiver to exclude the additional disclosures, on a case-by-case basis.  Filers should be aware that any such waiver will likely result in a qualified audit opinion, and should therefore give careful consideration to the consequences of such a move, in consultation with their auditors, in advance of submitting a request to the Department.

Requests for a permitted practice, or waiver of the new loss disclosure requirements, should be directed to: with a copy to Eva Conley at

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