Use reinsurance accounting terminology correctly and separate a contract's insurance component from its financing component.
Free CAS Exam 6-U.S. (Regulation and Financial Reporting) lesson in Reinsurance Accounting Principles. 8 min read, ~1,149 words.
Reinsurance accounting applies only when the contract transfers significant insurance risk; otherwise use deposit accounting. Insurance risk has two parts: underwriting risk (uncertain ultimate amount of net cash flows) and timing risk (uncertain timing of those cash flows). The reinsurer must assume significant insurance risk AND face a reasonable possibility...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- D1
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