Gains and losses are automatically assigned to either the AVR or IMR during the ISTAR Refresh process based on NAIC guidelines for determining credit (AVR) and non-credit (IMR) related losses. Factors that are used in this determination include:
- Security type
- Maximum NAIC Designation during the holding period
- Change in NAIC Designation during the holding period
In addition to the ISTAR determination, gains and losses on sales and impairments can be classified as credit or non-credit related. Any credit related losses are reported on the AVR and all non-credit related losses are reported on the IMR.
When booking impairments, the STAR Impairments panel allows for the total impairment amount to be allocated between Credit and Non-Credit Loss amounts. On sales, the gain/loss may also be assigned as credit and non-credit. To assign these values on a sell, after booking the trade, select the trade using the Non-Financial Trade Data Modification panel, and allocate the Total Gain Loss to Realized Credit GL and Realized Noncredit GL.
If the gain/loss on an impairment or sale has been assigned as credit and non-credit, the elected treatment takes precedence over the ISTAR determination of the placement. All credit related gain/loss is assigned to the AVR and all non-credit gain/loss is assigned to the IMR.
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