As you are aware, new Statements of Statutory Accounting Principles resulting from the NAIC codification project took effect in Wisconsin on January 1, 2001. Under Statement of Statutory Accounting Principles #4 (SSAP 4), assets not specifically identified as admitted in the SSAP pronouncements are to be nonadmitted. The NAIC Statutory Accounting Principles Working Group has released a second draft of Issue Paper #107 on Health Care Receivables (see below) which will be the subject of a hearing at the March 2001 National Meeting. A lack of formal guidance exists in the area of Health Care Receivables until such time as a SSAP is formally adopted by the NAIC Plenary. This would result in nonadmitting items such as pharmaceutical rebates receivable and advances to providers as of January 1, 2001, under SSAP 4. However, a state insurance department may permit or prescribe other accounting treatments to be followed.
Please be advised that it is prescribed for Wisconsin domiciled insurers to report Health Care Receivables in accordance with the most current draft of IP 107 for the period beginning January 1, 2001, until such time as a SSAP on Health Care Receivables takes effect. Please note that this bulletin does not, however, alter Wisconsin's prescribed practice of requiring Health Maintenance Organizations to show Amounts Due From Affiliates, and Amounts Due from IPAs as nonadmitted assets as described in the "Special Health Maintenance Organization Annual Statement Blank Instructions for Wisconsin," and in ss. Ins 9.10 and 9.11, Wis. Adm. Code.
The commissioner may permit an insurer to use an accounting practice that deviates from the otherwise prescribed statutory accounting treatment. An insurer may file a written request with justification supporting an alternative treatment if it feels a situation exists in the insurer that justifies deviation from the treatment prescribed in this bulletin.
Questions related to this bulletin may be directed to Richard Hinkel at (608) 267-7910 for Health Maintenance Organizations, or Stephen Caughill at (608) 267-2049 for other insurers.
EXPOSURE DRAFT - Issue Paper No. 107 - Health Care Receivables