Odomorik 10: Notes to Financial Statements Flashcards Preview

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Flashcards in Odomorik 10: Notes to Financial Statements Deck (20)
1

Notes To Financial Statement, Reinsurance Section A

Unsecured Reinsurance Recoverables; disclose reinsurers that don't provide collateral if recoverables exceed 3% of surplus

2

Retroactive reinsurance accounting treatment

Ceded reserves are negative write-in (balance sheet), any gain recorded as other income

3

Retroactive Reinsurance Note disclosures

Reserves transferred
Consideration paid
Paid losses reimbursed
Special surplus generated
Reinsurers involved

4

Notes to Financial Statement, Change in Incurred Loss/LAE

Discloses changes in estimates from prior AYs; it lists amount of change, LOBs responsible, reasons for change

5

Notes to Financial Statement, Premium Deficiency Reserves

When UEP is not enough to cover losses to be incurred; disclose amount and whether or not investment income was considered

6

Notes to Financial Statement, Discounting

Part 1: whether tabular discounting is used (basis/assumptions), Part 2: whether non-tab is used (basis/assumptions); also, changes in assumptions

7

Notes to Financial Statement, A/E Reserves

Disclose LOBs affected, nature of exposures, reserving methodology; 5-year table with payments, reserves, and pure IBNR (D, A, Net)

8

Notes to Financial Statement, Summary of Significant Accounting Policies

Source of accounting rules (typically NAIC), exceptions made to above rules, either prescribed or permitted

9

Events Subsequent

Events that occur between accounting date of statement and date of issue

10

Events Subsequent, Type 1

"Recognized Subsequent Events" -- additional detail on conditions that existed as of accounting date; disclosure only necessary to prevent statements from being misleading (Ex: booked reserves not adjusted in time)

11

Events Subsequent, Type 2

"Nonrecognized Subsequent Events" -- events that did not exist as of accounting date (ex: large claim on 1/15); described if they "may have a material effect on the financial condition"

12

Notes to Financial Statement, Intercompany Pooling

Used to assess solvency of aggregate group; mentions Members, Lead company, Pooling percentage

13

Notes to Financial Statement, Structured Settlements

Discloses potential credit risk due to life insurer going insolvent (annuities paid)

14

Notes to Financial Statement, High Deductibles

Discloses reserve credit recognized for unpaid claims and amount billed but not yet collected

15

Reinsurance Note to Financial Statements Sections

CRUDCRUD
Ceded and assumed
Retro
Unsecured
Deposit
Commutation
Run off
Uncollectible
Disputed

16

Unsecured Reinsurance Recoverable Note Disclosures

Name
Paid recoverables
Reserve recoverables
Ceded UEPR

17

Notes requiring direct actuary involvement

CRAPD
Change in incurred LLAE
Reinsurance
A&E
Premium deficiency reserves
Discounting

18

Notes potentially relevant to actuaries

SHIES
Structured settlement
High deductibles
Intercompany pooling
Events subsequent
Significant accounting policies

19

Tabular discount

Based on interest rates/mortality assumptions in tables from regulators

20

Non-tabular discount

Need permission from regulator (mainly WC, medical prof. liability) -- can be sign of regulatory concerns