Exam DISC-IA Practice Question 7
Study guide: Exam DISC-IA
No SSAP addresses a particular transaction. The NAIC Annual Statement Instructions call for one treatment, an interpretation (INT) adopted by the NAIC's Statutory Accounting Principles Working Group calls for a different one, and FASB Concepts Statement No. 8 suggests a third. The insurer's domiciliary state has no prescribed practice on the point and has granted no permitted practice. Under the statutory hierarchy, which treatment should the insurer follow?
- A) The Annual Statement Instructions, because they govern the statutory blank
- B) The INT, because Level 2 guidance governs over Level 3 when they conflict
- C) The Concepts Statement, because conceptual guidance outranks specific rules
- D) Any of the three, because none of them is a Level 1 source
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