Statutory Issue Paper No62R - Reinsurance Focus

Property andCasualty Reinsurance
SSAP No. 62R
STATEMENT OF STATUTORY ACCOUNTING PRINCIPLES NO. 62 R
PROPERTY AND CASUALTY REINSURANCE
Status
Type of Issue: Common Area
Issued: Finalized March 13, 2000
Effective Date: January 1, 2001, Substantive revisions in paragraphs 31.e., 68-71 and 86 are
effective January 1, 2010
Affects:
No other pronouncements
Affected by: Paragraph 35 superseded by SSAP No. 75, Substantively revised in TBD 2009
(Detail of revisions are included within Issue Paper No. 137)
Interpreted by: INT 01-33, INT 02-01, INT 02-06, INT 02-09, INT 02-22, INT 03-02
STATUS .......................................................................................................................................................................1
SCOPE OF STATEMENT .........................................................................................................................................3
SUMMARY CONCLUSION......................................................................................................................................3
General ..........................................................................................................................................................................3
Characteristics of Reinsurance Agreements ..................................................................................................................4
Required Terms for Reinsurance Agreements...............................................................................................................4
Reinsurance Agreements with Multiple Cedents...........................................................................................................5
Reinsurance Contracts Must Include Transfer of Risk..................................................................................................5
Accounting for Reinsurance ..........................................................................................................................................7
Accounting for Prospective Reinsurance Agreements ..................................................................................................8
Accounting for Retroactive Reinsurance Agreements...................................................................................................8
Deposit Accounting.....................................................................................................................................................11
Assumed Reinsurance .................................................................................................................................................11
Ceded Reinsurance ......................................................................................................................................................12
Adjustable Features/Retrospective Rating...................................................................................................................13
Commissions ...............................................................................................................................................................14
Provision for Reinsurance ...........................................................................................................................................14
Disputed Items.............................................................................................................................................................14
Uncollectible Reinsurance...........................................................................................................................................15
Commutations .............................................................................................................................................................15
National Flood Insurance Program..............................................................................................................................15
Accounting for the Transfer of Property and Casualty Run-off Agreements ..............................................................15
Criteria.........................................................................................................................................................................16
Statutory Schedules and Exhibits ................................................................................................................................17
Disclosures ..................................................................................................................................................................17
Relevant Literature ......................................................................................................................................................20
Effective Date and Transition......................................................................................................................................21
AUTHORITATIVE LITERATURE .......................................................................................................................22
Generally Accepted Accounting Principles.................................................................................................................22
RELEVANT ISSUE PAPERS..................................................................................................................................22
CLASSIFYING REINSURANCE CONTRACTS..................................................................................................23
SSAP NO. 62—EXHIBIT A .....................................................................................................................................24
Implementation Questions and Answers .....................................................................................................................24
SSAP NO. 62—EXHIBIT B......................................................................................................................................37
P&C Runoff Reinsurance Transactions.......................................................................................................................37
© 2009 National Association of Insurance Commissioners 62-1