Schedule F Part 1 and Part 3
Schedule F Part 1 Col 6: reinsurance on paid losses & lae, in the Odomirok book it has: (reinsurance recoverable on paid losses and LAE) represents losses and LAE that the ceding company has already paid but for which the insurance company has yet to pay to the reinsured. Then for the Part 3 Col 7&8, it has: Columns 7 and 8 provide recoverables on paid losses and LAE. Are they not the same thing? I am just really confused about these two.
Comments
Part 1 is assumed reinsurance - what the reporting company needs to pay. Part 3 is ceded reinsurance - what the reporting company needs to get paid.
I apologize but I still don't understand.
Part 1: I truly am confused because the first part of the sentence "L&LAE that the ceding company has already PAID" seems to be contradictory to the second half "but for which the insurance company has YET to pay to the reinsured". I thought the 'insurance company' in this sentence = ceding company = reporting company, the 'reinsured' = original policyholders. So how it paid but then 'yet to pay'.
If I understand this sentence another way as "The ceding company (or insurance company) has already paid out L&LAE made by the original policyholders (reinsured), but is still awaiting reimbursement from the reinsurer for the portion of losses covered under the reinsurance agreement." Then how is this different than the Part 3 Col 7&8 "because the company is awaiting receipt of a recovery from its reinsurer on payments that the insurance company already made to the claimant"
In Part 1, "insurance company" is the "reporting company." "Ceding company" is the "reinsured company." Here, "insurance company" is in the role of the reinsurer. Policyholders don't enter into this.
In part 3, "insurance company" is both the "reporting company" and the "reinsured company."