2019 Fall Q15 - Total Recoverables
I made one of the common errors listed on the examiner's report.
Given in the problem:
The second bullet point states "recoverables on Loss & LAE IBNR 750,000" and the next line states "table include all 2018 reinsurance recoverables".
I thought that amounts listed in the table would be included in the 750,000. Is there something in the wording of these two that tells us that they are mutually exclusive? I get mixed up on the wording from time to time. Thanks!
Comments
The table is a schedule of payments, with pertinent dates. It will only cover recoverables on paids, not on reserves.
Ok. I think I see the issue, I misinterpreted "Loss & LAE IBNR" from the second bullet point as "Loss" & "LAE IBNR"; that is, that the IBNR only pertained to the LAE and that "Loss" included all losses.
No, that phrase means IBNR of loss and of LAE.
In the formula sheet, T= Total Unpaid Recoverables, but the Examiner's report includes paid recoverables, as well. Is the formula sheet incorrect? Should it be: Authorised Reinsurer Slow Paying = 20% x max (T+P-C, Pn90 + Pd90)
We will look into this and get back to you. Thanks.
Hello @Emma
The cheat sheet has been corrected. Thank for pointing this out.
I'm confused by Emma's comment pointing out that the Examiner's report includes paid recoverables, because it looks like the examiner's report is not including paid recoverables. Wouldn't it only be a recoverable (able to be recovered) if it hasn't been paid/recovered yet?
Edit:
Oh, I see what's going on. It's the confusing naming; unpaid recoverables is technically probably correct, but she is saying that recoverables on paid losses are being included, not necessarily recoverables that have been paid.
Correct.