Ssap 9. SSAP 62 Reinsurance Flashcards 2019-01-10

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Statements of Standard Accounting Practice

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The assuming company will record the consideration to be returned to the ceding company as a liability 5. Reinsurance recoverable on loss payments is an admitted asset. Please contact us by phone on +44 0 20 7920 8620, by fax on +44 0 20 7920 8621 or by email at for more information. In this case, the ceding company eliminates the reinsurance recoverable, and records the cash received as a negative paid loss. This body is funded partly through the U.

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SSAP No. 43

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The agreement must only cover liabilities of lines that are no longer actively marketed by the transferring entity 8. The regulatory body responsible for generating them was called the Accounting Standards Committee. Owing to the length of time taken to complete such contracts, to defer recording turnover and taking profit into account until completion may result in the profit and loss account income statement reflecting not so much a fair view of the results of the activity of the company during the period but rather the results relating to contracts that have been completed in the period. Occasionally, the reinsurance agreement will be initiated before the beginning of the policy, but is not finalized until after the policy begins. Assuming entity is properly licensed 2. Changes in the estimated reinsurance recoverables are recognized as changes in losses incurred in the income statement. Summaries Summary published by the Financial Reporting Council.

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SSAP 9 Stocks and long term contracts

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A copy of the standard as issued in April 1974 is available from the Library. The determination of profit for an accounting period involves the allocation of costs to reporting periods. The recoverables are recorded as a contra liability. If the assuming insurer receives the premium prior to the effective date, it needs to record it as a liability, and can not consider it as income until the effective date. The consideration paid reduces the assets 1. Assumptions in estimating the reinsurance recoverables should be the same as those used in estimating the related liabilities. The write-down shall be recognized in earnings as a realized loss.

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SSAP No. 43

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Category Three Category Three includes securities where the collection of all contractual cash flows are probable. Summaries Summary published by the Financial Reporting Council. The assuming reinsurer must receive financial strength ratings from at least two different agencies that is at least equal to that of the transferring insurer 6. Category Two Category Two includes securities where the collection of all contractual cash flows are not probable. Instead, it is recorded as a liability, retroactive reinsurance reserve assumed.

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What Is SSAP Accounting?

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A change in the Provision is a direct charge or credit to surplus. The total loss recorded shall be bifurcated between the interest related loss and the non-interest related loss. Guides and publications Related Financial Reporting Review Panel finding, published on 18 October 2000. Please contact us by phone on +44 0 20 7920 8620, by fax on +44 0 20 7920 8621 or by email at for more information. Using the effective interest rate method, the security shall be prospectively accreted over its remaining life to the undiscounted estimate of principal recovery. These contracts require special accounting treatment, as they can be used by insurers to manipulate underwriting results 2. Summaries Summary published by the Financial Reporting Council.


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SSAP 62 Reinsurance Flashcards

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The ceding entity records the amount paid as a deposit. Summaries Summary published by the Financial Reporting Council. Vice President Investment Accounting Disclaimer: This information was developed using publicly available information, internally developed data and outside sources believed to be reliable. Summaries Summary published by the Financial Reporting Council. The consideration received increases the assets 1. Please contact us by phone on +44 0 20 7920 8620, by fax on +44 0 20 7920 8621 or by email at for more information.

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Financial Reporting Council

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The assuming entity records it as a liability. Retroactive reinsurance accounting also applies to liabilities transferred in court ordered rehabilitations, liquidations or receiverships. The agreement should not contain any adjustable features, profit sharing or retrospective rating 4. Note that the transferring insurer is still primarily liable. The write-down shall be recognized in earnings as a realized loss.

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Statements of Standard Accounting Practice

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It does not include the amendments made in October 1992 and December 2000. A consolidated version of the standard which includes these amendments is available from the Library. The adjustment shall be calculated by comparing the present value of the cash flows and the amortized cost basis of the security as of July 1, 2009. The Special Surplus also needs to be adjusted to reflect any change in the ceded reserves 5. At each reporting date, the amount of the deposit is adjusted to reflect both the payments made to date, and expected future payments.

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SSAP 62 Reinsurance Flashcards

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If this present value is less than the amortized cost of the security, the security must be written down to this present value amount. An agent bank the Agent issues a letter of credit to the ceding company, on behalf of a group of banks the Issuing Banks. Using the effective interest rate method, the security shall be prospectively accreted over its remaining life to the undiscounted estimate of principal recovery. The assumed retroactive reinsurance is excluded from the existing reserves. Category Three excludes securities that can be included in Category One or Two. Run off agreements shall be accounted for as prospective reinsurance agreements. Reinsurance recoverables should be recognized in a manner consistent with the recognition of the liabilities in the underlying reinsured contracts.

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