Spring 2017 Practice Problems
Hi, I'm a little confused about how to account for the change in unearned premium when calculating the net earned premium.
I thought we were supposed to reverse the sign of the change, so if there was a decrease we would add back that amount. However, in the first question under the Spring 2017 #13 practice problems, the change in UEP is a decrease but we still are subtracting it from NWP. I thought we'd add it back since we're supposed to reverse the sign of the change. Can you explain the logic for that?
Comments
Well yes there was a decrease in the UEP and it was added to the NWP to get EP - You should take a closer look at the question again