Prospective vs retrospective
For spring 2019 b.ii
Should we answer it based on prospective vs retrospective. Like following:
For retrospective reinsurance, recoverable on reserve is recorded as a negative write in liability.
For prospective reinsurance, recoverable on reserve in net of reinsurance (Also liability).
Thanks
Comments
Hi @Alice,
I assume you're referring to Q17 on the 2019.Spring exam. Also I think you meant to say retroactive reinsurance (rather than retrospective reinsurance). What you wrote above is correct for SAP accounting treatment but you didn't mention GAAP accounting. Here's how I would have answered the question:
prospective reinsurance
retroactive reinsurance:
Yes, I mean and Q17 and "retroactive".
Okay! Thank you very much for the help.