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Investments - Equity Method and Joint Ventures - Simplifying the Transition to the Equity Method of
Accounting:
In March 2016, the FASB issued amendments which eliminate the requirement that when an investment
qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an
investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if
the equity method had been in effect during all previous periods that the investment had been held. Per the amendments,
upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The
amendments also require that an entity that has an available-for-sale equity security that becomes qualified for the equity
method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other
comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments are
effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016.
The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest
or degree of influence that result in the adoption of the equity method. Early adoption is permitted. We have evaluated the
adoption of this guidance and do not expect the guidance to have a significant impact on our financial position, results of
operations, or disclosures.
Derivatives and Hedging - Contingent Put and Call Options in Debt Instruments:
In March 2016, the FASB
issued amendments which clarify what steps are required when assessing whether the economic characteristics and risks
of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is
one of the criteria for bifurcating an embedded derivative. Consequently, when a call (put) option is contingently
exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) option is
related to interest rates or credit risks. The amendments are effective for public business entities for fiscal years beginning
after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted, including adoption in
an interim period. We have evaluated the adoption of this guidance and do not expect the guidance to have a significant
impact on our financial position, results of operations, or disclosures.
Derivatives and Hedging - Effect of Derivative Contract Novations on Existing Hedge Accounting
Relationships:
In March 2016, the FASB issued amendments which clarify that a change in the counterparty to a
derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation
of that hedging relationship provided that all other hedge accounting criteria remain intact. The amendments are effective
for public business entities for financial statements issued for fiscal years beginning after December 15, 2016, and interim
periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We have evaluated
the adoption of this guidance and do not expect the guidance to have a significant impact on our financial position, results
of operations, or disclosures.
Leases:
In February 2016, the FASB issued updated guidance for accounting for leases. Per the amendments,
lessees will be required to recognize all leases on the balance sheet, with the exception of short-term leases. A lease
liability will be recorded for the obligation of a lessee to make lease payments arising from a lease. A right-of-use asset,
will be recorded which represents the lessee’s right to use, or to control the use of, a specified asset for a lease term.
Under the new guidance, lessor accounting is largely unchanged. The amendments are effective for public companies for
fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is
permitted, including adoption in an interim period. We have identified certain operating leases in scope of this guidance to
include office space and equipment leases (See Note 15 for current balances of leases in scope). The leases within scope
of this guidance will increase our right-of-use assets recorded on our financial position, however we estimate leases within
scope of the guidance to represent less than 1% of our total assets as of December 31, 2016. We estimate that the
adoption of this guidance will not have a significant impact on our financial position, results of operations and disclosures.
Financial Instruments - Overall - Recognition and Measurement of Financial Assets and Financial Liabilities:
In January 2016, the FASB issued guidance to address certain aspects of recognition, measurement, presentation, and
disclosure of financial instruments. The main provisions require that equity investments be measured at fair value with
changes recognized in net income; that changes in instrument-specific credit risk for financial liabilities that are measured
under the fair value option be recognized in other comprehensive income; and that entities would make the assessment of
the ability to realize a deferred tax asset (DTA) related to an available-for-sale (AFS) debt security in combination with the
entity's other DTAs. The amendments are effective for public companies for fiscal years beginning after December 15,
2017, including interim periods within those fiscal years. Early adoption is not permitted, with the exception of the own
credit provision if an entity has elected to measure a liability at fair value. We have identified certain financial instruments
in scope of this guidance to include certain fixed maturity securities, perpetual securities and equity securities (See Note 3
for current balances of instruments in scope). We estimate that the impact of this guidance will increase volatility in our
statement of operations and we are continuing to evaluate the impact of this guidance on our statement of financial
position, operations, or disclosures.
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