Sales of securities are recorded as of the trade date. A receivable due from the broker is established in instances when a security has been sold…

According to the National Association of Insurance Commissioners (NAIC) Statement of Statutory Accounting Principles (SSAP) No. 4R, receivables for securities sold are to be non-admitted if they are not received within a specific timeframe after the settlement date. For publicly-traded securities, this period is 15 business days. For privately-placed securities, the period is 30 business days. As the question does not specify the security type and publicly-traded securities represent the more common transaction, the 15-day rule is the most applicable general answer. This statutory requirement ensures that aged receivables, which have a higher risk of uncollectibility, are not recognized as admitted assets supporting an insurer's solvency.

B. This is the correct timeframe (30 business days) for privately-placed securities, but it is not the general rule and is less common than the rule for publicly-traded securities.

C. This number of days is not specified in the NAIC statutory accounting principles for the non-admittance of receivables from securities sales.

D. This timeframe (90 days) is typically associated with the non-admittance of other assets, such as premium balances receivable from agents, not receivables for securities sold.

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1. National Association of Insurance Commissioners (NAIC). Accounting Practices and Procedures Manual. Kansas City

MO: NAIC. Statement of Statutory Accounting Principles (SSAP) No. 4R—Assets and Nonadmitted Assets

Paragraph 3.i: "The following assets shall be reported as nonadmitted assets: ... i. Receivables for securities not received within 15 business days of the settlement date for publicly-traded securities and 30 business days of the settlement date for privately-placed securities."

2. National Association of Insurance Commissioners (NAIC). Accounting Practices and Procedures Manual. Kansas City

MO: NAIC. Statement of Statutory Accounting Principles (SSAP) No. 103R—Transfers and Servicing of Financial Assets and Extinguishments of Liabilities

Paragraph 10: "A receivable for securities sold shall be nonadmitted if not received within the timeframe specified in SSAP No. 4R—Assets and Nonadmitted Assets."

3. Pottier

S. W. (2015). Statutory Accounting and Insurer Solvency. University of Wisconsin-Madison

School of Business

Course Material for Actuarial Science 655. This courseware discusses the principles of statutory accounting

including the classification of admitted and non-admitted assets as defined by the NAIC AP&P Manual

reinforcing the rules found in SSAP No. 4R.