Policy Issues

Industry Request for Clarification of Life Risk-Based Capital Treatment of Mortgages Affected by COVID-19

March 25, 2020

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This week the Real Estate Roundtable along with partner trade associations wrote to Scott A. White, Chair of National Association of Insurance Commissioners and Vice Chair, Eric Cioppa requesting that the National Association of Insurance Commissioners (NAIC) issue immediate clarifying guidance that temporary forbearance, deferrals, or modifications of mortgage loans in response to the COVID-19 event will not trigger treatment as a restructured or delinquent loan for accounting purposes under SSAP No. 36 – Troubled Debt Restructurings, and for purposes of Life Risk-Based Capital.

The resulting clarity will better enable life insurance companies to work prudently and swiftly with borrowers, mitigate COVID-19 impacts on borrowers, on life insurance companies, and on the nation’s economy; and ultimately to lead to improved loan performance and reduced credit risk. Only the NAIC can provide that certainty.