Spring 2016 #14
The examiner's report includes "miscellaneous balances payable" as part of the total collateral. How would we know that it's a payable related to reinsurance and not some other creditor?
It looks like you're new here. If you want to get involved, click one of these buttons!
The examiner's report includes "miscellaneous balances payable" as part of the total collateral. How would we know that it's a payable related to reinsurance and not some other creditor?
Comments
Here, "payable" means payable to reinsurer, because of the question's context. This is not an official AS line item.
When we get a question like this and we are unclear on if the item should be included as part of the total collateral, is it better to assume that it is or should we state our assumption that we are going to assume this is payable to the reinsurer?
This question simply tested the reins provision formula. There were not any tricks about collateral.
It is conceivable that they ask questions where they test what should be included in collateral. There, you would have to know which items are included and not included. In this scenario, assuming all items are included would not help you.