Provision Reinsurance
Hi,
Quick question about P(90,n) and slow paying ratio.
On Exam F2016 #13, when calculating the slow paying ratio, the numerator is 16+4, which is all those greater than P(90,n), including P(120,n)
But on Exam F2018 #15, when calculating slow paying ratio, the numerator is simply 6, rather than 6+9 (if you include the unpaid on Dec 25th, which makes sense b/c all those greater than P(90, n).
So my question is for P(90,n), if we see this on an exam, do we include everything unpaid from P(90,n) onwards, or not?
How can we tell?
Comments
Hi there,
I realized that for F2018 #15, as of 12/31/2017, we're going to go backwards throughout that year 2017, so December 25 is actually <90 days.
But say for that same problem, February 14th is 'NOT in dispute', but 'Unpaid', would you include that 5 in the numerator to be 6+5?
February 14th >90 days, >120 days as well.
When do we know we should add P(n,120) into P(n, 90), and when can we assume it's already included on an exam problem?
Schedule F Part 3 columns 38-42 clearly partition the recoverables by the number of days they are overdue. There is a column for 91-120 days, and another one for over 120 days. The confusion arises from the question makers introducing both a ">90" category and a ">120" category. So, this is poor question writing; this confusion does not exist in the actual Schedule F.