Exam DISC-IA Practice Question 26
Study guide: Exam DISC-IA
A ceding insurer's contract with a reinsurer does not, despite its form, transfer both underwriting risk and timing risk. Under SSAP No. 62R, how does the ceding insurer account for it?
- A) Record ceded premium and reduce loss reserves for expected recoveries
- B) Record the net consideration as a deposit; do not reduce loss reserves
- C) Record ceded premium, but take credit for recoveries only when paid
- D) Expense the net consideration as an underwriting expense when paid
Answer this question and see the worked solution