Captive Insurer (Excluding Risk Retention Groups) Compliance with Financial Accounting Standards Board Accounting Standards ("FASB") Update ("ASU") 2015-09

BRIAN SANDOVAL Governor STATE OF NEVADA C.J. MANTHE Director [LOGO] BARBARA D. RICHARDSON Commissioner DEPARTMENT OF BUSINESS AND INDUSTRY DIVISION OF INSURANCE 1818 East College Pkwy., Suite 103 Carson City, Nevada 89706 (775) 687-0700 • Fax (775) 687-0787 Website: doi.nv.gov E-mail: insinfo@doi.nv.gov Bulletin 18-001 April 16, 2018 # CAPTIVE INSURER (EXCLUDING RISK RETENTION GROUPS) COMPLIANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD ACCOUNTING STANDARDS ("FASB") UPDATE ("ASU") 2015-09 Nevada Revised Statutes ("NRS") 694C.400(2) requires an annual audit and Nevada Administrative Code ("NAC") 694C.210(4)(e)(5) states that the annual audit required must include Notes to Financial Statements required by United States Generally Accepted Accounting Principles ("GAAP"), or as required by any other comprehensive basis of accounting used by the captive insurer and approved by the Commissioner. The accounting standards codified by FASB are a comprehensive basis that is regularly updated. FASB ASU 2015-09 is a recent update pertaining to insurance companies that issue short-duration insurance contracts. The Nevada Division of Insurance ("Division") requires captive insurers (excluding risk retention groups) to submit annual audit reports in compliance with FASB ASU 2015-09, or with a qualified opinion based solely on the non-compliance of FASB ASU 2015-09 and/or any other standard required by the Commissioner that may be a departure from GAAP. If you have any questions, contact the Division at captives@doi.nv.gov. BARBARA D. RICHARDSON Commissioner of Insurance