Calculate the total reinsurance provision assuming only 2 reinsurers A & B. (Modeled on 2017.Spring #14)

0.000

total provision | |

provision for reinsurer A | |

provision for reinsurer B | |

slow-pay ratio (enter decimal) | |

is B a slow-payer? (y/n) |

miscellaneous information |
notation |
unauthorizedreinsurer A |
authorized reinsurer B |

amount received: prior 90 days | Recvd | ||

letters of credit (LOC) | part of C | ||

ceded balances payable | part of C | ||

other amounts due reinsurers | part of C |

recoverables NOT in dispute |
notation |
unauthorizedreinsurer A |
authorized reinsurer B |

Total reinsurance recoverable |
T^{n} |
||

recoverable on Paid loss & LAE |
P^{n} |
||

recoverable on Paid loss & LAE > 90 days past due |
P^{n}_{90} |
||

recoverable on Paid loss & LAE > 120 days past due |
P^{n}_{120} |

recoverables in dispute |
notation |
unauthorizedreinsurer A |
authorized reinsurer B |

Total reinsurance recoverable |
T^{d} |
||

recoverable on Paid loss loss & LAE |
P^{d} |
||

recoverable on Paid loss & LAE > 90 days past due |
P^{d}_{90} |
||

recoverable on Paid loss & LAE > 120 days past due |
P^{d}_{120} |

→ Collateral that is __not__ under control of the insurer __cannot__ be counted. An **example** of collateral that cannot be counted is: collateral held in trust with the reinsurer.

RP

= (T – C) + min( C , 20% x P^{n}_{90}) + min( C , 20% x T^{d} ) <== capped by T

where

T

= T^{n} + T^{d}

RP

= min( T – C + 20% x P^{n}_{90} + 20% x T^{d} , T )

(thx KB!)

RP(**not** slow-paying)

= 20% x (P^{n}_{90} + P^{d}_{90})

<== capped by T

RP(slow-paying)

= 20% x max( T – C , P^{n}_{90} + P^{d}_{90} )

<== capped by T

==> **slow-pay ratio**

= P^{n}_{90} / ( P^{n} + Recvd ) (Use slow-pay formula if ratio ≥ 20%)

total provision | |

provision for reinsurer A | |

provision for reinsurer B | |

slow-pay ratio | |

is B a slow-payer? |