Naic Blanks (E) Working Group - Blanks Agenda Submission Form

NAIC BLANKS (E) WORKING GROUP

Blanks Agenda Item Submission Form

DATE:02/15/2013
CONTACT PERSON:Peter Storms
TELEPHONE:(860) 836-2504
EMAIL ADDRESS:
ON BEHALF OF:
NAME:Peter Storms
TITLE:Senior Manager
AFFILIATION:Risk & Regulatory Consulting, LLC
ADDRESS:3 Farm Glen Blvd.
Farmington, CT 06032 / FOR NAIC USE ONLY
Agenda Item #2013-08BWGMOD
Year2013
Changes to Existing Reporting[X]
New Reporting Requirement[]
REVIEWED FOR ACCOUNTING PRACTICES AND PROCEDURES IMPACT
No Impact[ X ]
Modifies Required Disclosure[]
DISPOSITION
[]Rejected For Public Comment
[]Referred To Another NAIC Group
[X]Received For Public Comment
[]AdoptedDate
[]RejectedDate
[]DeferredDate
[]Other (Specify)

BLANK(S) TO WHICH PROPOSAL APPLIES

[X]ANNUAL STATEMENT[]QUARTERLY STATEMENT

[X]INSTRUCTIONS[X]CROSSCHECKS[X]BLANK

[]Life and Accident & Health[X]Property/Casualty[]Health

[]Separate Accounts[]Fraternal[X]Title

[]Other Specify

Anticipated Effective Date:Annual 2013

IDENTIFICATION OF ITEM(S) TO CHANGE

P&C Schedule F, Part5– Provision for Unauthorized Reinsurance, Cols 13, 14, 15, 18, 19 & 20

Title Schedule F, Part 3 – Provision for Unauthorized Reinsurance, Cols 13, 14, 15, 18, 19 & 20

P&C Schedule F, Part 8 – Total Provision Portion, Line 5 Caption

REASON, JUSTIFICATION FOR AND/OR BENEFIT OF CHANGE**

The objective of the proposed changes is to make the schedule more understandable to the reader and user.

The total provision developed (Column 20) is identical to that developed under the current format.

NAIC STAFF COMMENTS

Comment on Effective Reporting Date:

Other Comments:

______

**This section must be completed on all forms.Revised 6/13/2009

Overview of the Proposal:

Current Format

13 / 14 / 15 / 16 / 17 / 18 / 19 / 20
Other
Allowed
Offset Items / Cols.
6+7+11+
12+13 but
not in
Excess
of Col. 5 / Subtotal
Col. 5
Minus
Col. 14 / Recoverable Paid Losses
& LAE
Expenses Over
90 Days past Due not in Dispute / 20% of
Amount
in Col. 16 / Smaller of
Col. 14 or
Col. 17 / Smaller of Col. 14
or 20% of Amount
in Dispute Included
in Col. 5 / Total Provision for
Unauthorized
Reinsurance
Smaller of Col. 5 or
Cols. 15+18+19

Proposed Format (changed portions in Bold)

13 / 14 / 15 / 16 / 17 / 18 / 19 / 20
Trust Funds
and
Other
Allowed Offsets / Total Collateral and Offsets Allowed (Cols.
6+7+11+
12+13 but
not in
Excess
of Col. 5) / Provision for Unauthorized Reinsurance
(Col. 5 minus Col. 14) / Recoverable Paid Losses
& LAE
Expenses Over
90 Days past Due not in Dispute / 20% of
Amount
in Col. 16 / 20% of Amount in Dispute Included in Column 5 / Provision for Overdue Reinsurance
(Col 17 plus Col. 18) / Total
Provision forReinsurance Ceded to Unauthorized Reinsurers
(Cols 15 + 19 but not in Excess of
Col 5)

Detailed Description of Proposed Changes(Additions Underlined. Deletions Struckthrough)

P&C Schedule F, Part 5 and Title Schedule F, Part 3

Column 12 Heading – Miscellaneous Balances Payable

Column 13 Heading – Trust Funds and Other Allowed Offset Items

Column 14 Heading – Total Collateral and Offsets Allowed (Cols. 6 + 7 + 11 + 12 + 13 but not in excess of Col. 5)

Column 15 Heading –Provision for Unauthorized ReinsuranceSubtotal(Col. 5 minus Col. 14)

Comments – Column 15 lost its identity as the provision for unauthorized reinsurance when the schedule was expanded to incorporate the penalty provision for overdue reinsurance at the same time that schedules developing the penalty provision for authorized reinsurers were added, current Parts 7 and 8.

Column 16 Heading – Recoverable Paid Losses & LAE Expenses Over 90 Days past Due not in Dispute

Column 17 Heading – 20% of Amount in Col. 16

Column 18 Heading – 20% of Amount in Dispute Included in Col. 5Smaller of Col. 14or Col. 17

Comment – This is the same as current Col 19 without the limitation relative to Col. 14. Because of the “Not in Excess of” limitation in Col. 20, the “Smaller of” limitation in current Columns 18 & 19 is unnecessary.)

Column 19 Heading –Provision for Overdue Reinsurance (Col. 17 plus Col. 18)Smaller of Col. 14or 20% of Amount in Dispute Included in Col. 5

Column 20 Heading – Total Provision for Reinsurance Ceded toUnauthorized Reinsurersance (Col. 15 plus Col. 19 but not in excess of Col. 5)Smaller of Col. 5 or Cols 15+ 18 + 19

P&C Schedule F, Part 8:

Line 5. Provision for Reinsurance Ceded to Unauthorized Reinsurersance (Schedule F, Part 5, Col. 20 x 1000)

Instructions – Revise as applicable.

ANNUAL STATEMENT BLANK – PROPERTY

SCHEDULE F – PART 5

Provision for Unauthorized Reinsurance as of December 31, Current Year (000 OMITTED)

1 / 2 / 3 / 4 / 5 / 6 / 7 / Letter of Credit Issuing
or Confirming Bank (a) / 11 / 12 / 13 / 14 / 15 / 16 / 17 / 18 / 19 / 20
Federal
ID
Number / NAIC
Company
Code / Name
of
Reinsurer / Domiciliary
Jurisdiction / Reinsurance
Recoverable
All Items
(Schedule F
Part 3,
Col. 15) / Funds Held
By Company
Under
Reinsurance
Treaties / Letters
of
Credit / 8
American
Bankers
Association
(ABA)
Routing
Number / 9
Letter
of
Credit
Code / 10
Bank
Name / Ceded
Balances
Payable / Miscellaneous
Balances Payable / Trust Funds
and
Other
Allowed
Offset
Items / Total Collateral and Offsets Allowed (Cols.
6+7+11+
12+13 but
not in
Excess
of Col. 5) / Provision for Unauthorized Reinsurance
Subtotal
(Col. 5 minus Col. 14) / Recoverable Paid Losses
& LAE
Expenses Over
90 Days past Due not in Dispute / 20% of
Amount
in Col. 16 / 20% of Amount in Dispute Included in Column 5
Smaller of Col. 14 or Col. 17 / Provision for Overdue Reinsurance
(Col 17 plus Col. 18)Smaller of Col. 14 or 20% of Amount in Dispute included in Col.5 / Total
Provision for ReinsuranceCeded to Unauthorized Reinsurersance
(Col. 15 plus Col. 19 but not in Excess of Col. 5)Smaller of Col. 5 or Cols. 15 + 18 + 19
.....
.....
..... / ...
...
... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / .....
.....
..... / ....
....
.... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / .....
.....
..... / ......
......
...... / ......
......
...... / ......
......
......
9999999 Totals / XXX / XXX / XXX

1.Amounts in dispute totaling $______are included in Column 5.

2.Amounts in dispute totaling $______are excluded from Column 16.

(a) / Code / American
Bankers
Association
(ABA)
Routing
Number / Bank Name
...... / ...... / ......
...... / ...... / ......

SCHEDULE F – PART 8

Provision for Overdue Reinsurance as of December 31, Current Year

1
Federal
ID
Number / 2
NAIC
Company
Code / 3
Name
of
Reinsurer / 4
Reinsurance
Recoverable
All Items / 5
Funds Held By
Company Under
Reinsurance Treaties / 6
Letters
of
Credit / 7
Ceded
Balances
Payable / 8
Other
Miscellaneous
Balances / 9
Other
Allowed
Offset Items / 10
Sum of Cols. 5
through 9 but not in
Excess of Col. 4 / 11
Col 4 minus
Col. 10 / 12
Greater of Col. 11 or
Schedule F - Part 4
Cols. 8 + 9
......
......
...... / ....
....
.... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
...... / ......
......
......
9999999 Totals
1.Total......
2.Line 1 x .20......
3.Schedule F-Part 7, Col. 11......
4.Provision for Overdue Authorized Reinsurance (Lines 2 + 3)......
5.Provision for Reinsurance Ceded to Unauthorized Reinsurance (Schedule F-Part 5, Col. 20 x 1000)......
6.Provision for Reinsurance Ceded to Certified Reinsurers (Schedule F-Part 6, Section 1, Col 23 x 1,000)......
7.Provision for Overdue Reinsurance Ceded to Certified Reinsurers (Schedule F-Part 6, Section 2, Col 15 x 1000)......
8Provision for Reinsurance (Sum Lines 4 + 5 + 6 + 7) (Enter this amount on Page 3, Line 16)......

ANNUAL STATEMENT BLANK – TITLE

SCHEDULE F – PART 3

Provision for Unauthorized Reinsurance as of December 31, Current Year (000 OMITTED)

1
Federal
ID
Number / 2
NAIC
Company
Code / 3
Name
of
Reinsurer / 4
Domiciliary
Jurisdiction / 5
Reinsurance
Recoverable
all Items
Schedule F / 6
Funds Held By
Company
Under
Reinsurance
Treaties / 7
Letters
of
Credit / Letter of Credit Issuing or
Confirming Bank (a) / 11
Ceded
Balances
Payable / 12
Miscellaneous
Balances Payable / 13
Trust Funds and
Other
Allowed
Offset Items / 14
Total
Collateral and Offsets Allowed
(Cols. 6+7+11)
+12+13
but not in
excess of
Col. 5 / 15
Provision for Unauthorized Reinsurance
Subtotal
(Col. 5
minus
Col. 14) / 16
Recoverable Paid Losses
LAE
Expenses
Over 90 Days past Due
not in Dispute / 17
20%
of
Amount
in
Col. 16 / 18
20% of Amount in Dispute Included in Column 5Smaller of Col. 14 or Col. 17 / 19
Provision for Overdue Reinsurance
(Col 17 plus Col. 18)Smaller of Col. 14 or 20% of Amount in Dispute included in Col.5 / 20
Total
Provision for ReinsuranceCeded to Unauthorized Reinsurersance
(Col. 15 plus Col. 19 but not in Excess of
Col. 5)Smaller of Col. 5 or Cols. 15 + 18 + 19
8
American
Bankers
Association
(ABA)
Routing
Number / 9
Letter of
Credit
Code / 10
Bank
Name
9999999 Totals / XXX / XXX / XXX

ANNUAL STATEMENT INSTRUCTIONS – PROPERTY

SCHEDULE F – PART 5

PROVISION FORUNAUTHORIZED REINSURANCE

AS OF DECEMBER 31, CURRENT YEAR

Detail Eliminated To Conserve Space

Column 11–Ceded Balances Payable

From Schedule F, Part 3, Column 16.

Column 12–Miscellaneous Balances Payable

From Schedule F, Part 3, Column 17.

Offsets should be reported in Columns 11 and 12 to the extent allowable or appropriate.

Should agree with unauthorized portion of Schedule F, Part 3, Columns 16 and 17, respectively.

Column 13–Trust Funds and Other Allowed Offset Items

Report trust funds and other acceptable security.

Column 15–Provision for Unauthorized Reinsurance Subtotal

Amount recorded should not be less than zero.

Column 16–Recoverable Paid Losses and LAE Over 90 Days Past Due Not in Dispute

Eliminate items in dispute by reason of notification, arbitration or litigation from Schedule F, Part 4, Columns 8 plus 9. “Notification” means a formal written communication from a reinsurer denying the validity of coverage. (For items in dispute with affiliates, see the NAIC Accounting Practices and Procedures Manual).

Column 18 –20% of Amount in Dispute Included in Column 5Smaller of Column 14 or Column 17

This amount should never be less than zero.

Column 20–Total Provision for Reinsurance Ceded to Unauthorized Reinsurersance

If the company’s experience indicates that a higher amount should be provided, such higher amount should be entered.

Column 20 Total multiplied by 1000 should be entered on Schedule F, Part 8, Line 5.

This amount should never be less than zero.

ANNUAL STATEMENT INSTRUCTIONS – TITLE

SCHEDULE F – PART 3

PROVISION FORUNAUTHORIZED REINSURANCE

AS OF DECEMBER 31, CURRENT YEAR

Detail Eliminated To Conserve Space

Column 11–Ceded Balances Payable

From Schedule F, Part 2, Column 10.

Column 12–Miscellaneous Balances Payable

From Schedule F, Part 2, Column 11.

Both Column 11 and Column 12 are liabilities owed to the reinsurer.

Deduct:Reinsurance premiums paid by a ceding company prior to the effective date of the contract and reported as an Other Than Invested Asset. Refer to SSAPNo.62R, Property and Casualty Reinsurance.

Column 13–Trust Funds and Other Allowed Offset Items

Report trust funds and other acceptable security

Column 15–Provision for Unauthorized Reinsurance Subtotal

Amount recorded should not be less than zero.

Column 18–20% of Amount in Dispute Included in Column 5Smaller of Column 14 or Column 17

This amount should never be less than zero.

Column 20–Total Provision for Reinsurance Ceded to Unauthorized Reinsurance

If the company’s experience indicates that a higher amount should be provided, such higher amount should be entered.

Should never be less than zero.

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