Included in the Annual and Quarterly NAIC filings is the Notes to Financials (a.k.a. Notes or Footnotes). This schedule is a narrative requirement that includes a host of additional topics (notes). Even more information must be reported in specific formats to be included electronically to the NAIC, not just on the printed pages.  Notes have been a growing hot topic with companies  because of its increasing complexity and the amount of time needed to complete them – all while you are trying to finish and verify the rest of the statement data.  For example, in 2004 the Life, Accident and Health blank only required 196 unique lines of electronically captured data.  For 2021, this is now at 1097 lines.

Your financial accounting teams know this schedule has become a nightmare and often the one piece of their Annual Statement they spend the most time completing!

Typically, your financial team will complete the electronically captured data elements inside their annual statement software.  Then they will manipulate a separate document to complete the entire Notes to Financials requirement to file the PDF or printed version.  The NAIC mandates that the electronically data captured notes match what is represented on the published document.  Failure to do so, will likely result in having to do a refiling to the NAIC and no one wants that!  You will want to make sure the software you are using accounts for this potential inconsistency.  Sapiens’ StatementPro software now provides a single point of data entry for all electronically data captured notes and all the other narrative notes, so that the final document is completed in one place, thus reducing the potential for having data mismatches with entering information twice.

Some of the electronically data captured components have information that you reported on last year’s Notes schedule.  You will also want to double check that these amounts have been entered correctly from the previous year.  If these amounts don’t match, a refiling may be necessary.  Many software packages will automatically transfer your amounts from the previous year to reduce any potential errors with manual data entry.

You can always count on the NAIC constantly modifying requirements, year over year.  It is really important that your financial reporting team keeps up to date with the reporting changes.  The Notes to Financial schedule have had changes every year since I have been involved with the annuals and quarterly statements and that goes back to 1992.  The NAIC provides the Notes requirements inside their NAIC Instructions for purchase.  You may instead purchase the Instructions from Sapiens and they will be incorporated in the StatementPro software.  The instructions are represented in a ‘track changes’ format so that you are able to see what is new or what has been deleted since the previous year.  A good software vendor will communicate the annual changes to their users often and in many ways.

Getting your financial reporting teams the tools and information they need to complete this complex schedule will ensure a successful NAIC filing.

Learn more about our Annual Statement solutions here.

  • Financial
  • financial and compliance
  • insurance
  • insurer
  • insurers
  • NAIC
  • regulation compliance
  • Regulations
Jenny Schaub

Jenny Schaub Jenny Schaub graduated from the University of Iowa with a Bachelor’s degree in Economics. Her current role with Sapiens is Senior Business Analyst for StatementPro Annual Statement product. In the past, Jenny has been front line customer support, support manager, software training, product development and business analyst. She began with The Freedom Group/Fiserv/StoneRiver/Sapiens in 1992. Outside the office she enjoys playing volleyball, riding her bicycle, watching football and basketball and spending time with her husband, stepson and yellow lab.