SAP, an insurance company is given an option of recognizing salvage and subrogation upon receipt or accruing the estimated amount of salvage and subrogation related to ultimate claim costs by reducing the related reserves.
A. True
B. False
What includes a requirement that 20 percent of the change in net unearned premium reserves be included in payable income?
A. Reinsured income
B. Tax law
C. Loss adjustment
D. Reserve discounting
Tax law includes a provision that 50 percent of the tax-exempt interest income and the dividendsreceived deduction are exempt from taxation.
A. True
B. False
Under SAP, reserves for losses and loss adjustment expenses and unearned premiums ceded to reinsurers are reported as annual disable losses of the related reserves.
A. True
B. False
GAAP requires that all declared policyholder dividends be accrued at the balance sheet date, using actual amount to be paid.
A. True
B. False
Under SAP, contingent commissions are accrued over the same period in which the related underwriting results are recognized.
A. True
B. False
Changes in the deposit asset (liability), other than the unexpired portion of the coverage provided, are recorded as an accounting against the reimbursable loss.
A. True
B. False
Adjustments to the deposit related to the unexpired portion of the coverage are recorded as an adjustment to incurred losses.
A. True
B. False
What is a function of the actual recoveries to the total estimated recoveries?
A. amortization
B. reinsurance recoveries
C. deferred gain
D. intellectual premium
For which contracts, increasing the liabilities typically would be the most appropriate method when recognizing the charge to current income.
A. ultimate inception
B. retroactive
C. retroactive reinsurance
D. accounting reimbursement
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