Salvage and Subrogation in statutory liabilities Spring 2016 Q15 b
In the examiner's report it says a common error was "Including anticipated salvage/subrogation as a deduction in calculating net loss reserves (if Schedule P shows anticipated salvage/subrogation, these figures have already been removed from the loss reserves). First off, is this fact discussed in a wiki somewhere? I was not able to find anything when searching through besides that for SAP there is a choice in presenting reserves in schedule P gross or net of anticipated salvage and subrogation. If this statement in the examiner's report is true then does that mean whenever schedule P is shown net of salvage and subrogation, the anticipated salvage and subrogation must also be provided in schedule P? Then if reserves are shown gross of salvage and subrogation, does that mean the insurer should not report anticipated salvage and subrogation on schedule P?
Comments
We revised the wiki to mention this fact about S&S:
https://battleacts6us.ca/wiki6us/Odomirok.15-P#Overview_.26_Organization_of_Schedule_P:~:text=Side%20note%3A%20If%20salvage/subrogation%20is%20shown%20in%20Part%201%20then%20the%20total%20paid%20and%20total%20unpaid%20amounts%20are%20net%20of%20salvage/subrogation.%20This%20fact%20is%20important%20for%20an%20old%20exam%20problem%20from%20chapter%2022/33%20on%20SAP%20and%20GAAP%20accounting.
Thanks for pointing it out.
In my experience, S&S received and anticipated are always stated in their respective Sch P Part 1 columns, and the paid an unpaid loss columns are always net of these S&S figures.