The disclosure proposed by the NAIC’s Statutory Accounting Principles Working Group is on a fast track and follows action by the Financial Accounting Standards Board to cause holders of credit derivatives to note their presence. It was credit-default derivatives, one risky species of credit derivatives, that caused the downfall of giant AIG’s non-insurance subsidiaries that created and marketed these securities.
It is the life insurance industry that is more likely to hold such derivatives to securities affected by them.