Note
References such as page 70.60 or column (20) refer to the sample A/R (Annual Return) or sample Q/R (Quarterly Return).
A/R Ref:
page:
70.60 (Cdn InsRs)
page:
70.61 (Foreign InsRs)
Notation:
UEP ceded:
O/S Recov:
ReIns Recv:
ReIns Payable:
NOD:
LOC:
($) UnEarned Premiums ceded to assuming reinsurer
($) OutStanding losses Recoverable from assuming reinsurer
($) Reinsurance Receivable
($) Reinsurance Payable
($) Non-Owned Deposits (RSA + Other)
Also included in this column is FUNDS to secure payments from assuming insurer (new for 2018.)
($) Letters Of Credit
Formula 1:
deduction
= max(0, D)
Formula 2:
D
= ( UEP + O/S Recov + Reins Recv ) - ( Reins Pay + NOD + LOC* )
LOC Limit:
LOC*
= min[ LOC, (UEP + O/S) x 30% ] (Amounts for LOCs are limited, but the limit is applied in aggregate. See notes 2a & 2b below.)
1
- You must calculate D separately for each ReInsR
- D must be > 0 to effect a deduction in CapAvail
2a
For a single reinsurer, if the LOC aggregate limit is breached, simply cap that reinsurer's LOC at the limit.
2b
For multiple reinsurers, according to the Letters of Credit subsection under (4.3.3.4) from the MCT paper, "this limit is applied in the aggregate, not to individual reinsurance exposures." (The MCT paper provides no example to clarify the mechanics of this calculation.)
3
- If completing page 70.60 or 70.61, we would then just drop the ABS(D) into either col (42) or (44)
- If D is +ve then ABS(D) --> (42)
- If D is -ve then ABS(D) --> (44)
