15F#16
Hi, in b), for subsequent event, in the solution "...it will be material in future reserves", may I ask the what's the logic behind this? b/c if you compare 50M to the total reserves in 2014, it's only ~2%, which is <5%. Thank you.
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Hi, in b), for subsequent event, in the solution "...it will be material in future reserves", may I ask the what's the logic behind this? b/c if you compare 50M to the total reserves in 2014, it's only ~2%, which is <5%. Thank you.
Comments
You wouldn't compare the 50M to total incurred for materiality. You'd use reserves, surplus or CY earned premium. They may have used premium to decide that it's material.
Hello @Staff - AC , could you give a short explanation of why the "Events subsequent" is not acceptable answer, and why we should include "Summary of significant accounting principles"? I don't think the question disclose any source of rules of accounting.
"Events subsequent" is an acceptable answer.
"Summary of significant accounting principles" is an acceptable answer, because it applies to any situation. All annual statements fill in this item with the main system used (NAIC Accounting Practices and Procedures Manual) and any deviations from it, or the fact that there were no deviations.