Prepaid Reinsurance

[NicoleJ-HAIG]

I have tried to research this on my own, but I cannot seem to find clear guidance on the treatment. We have payments that were made on facultative treaties in December, but the treaties are not effective until January, therefore we currently have no payables set up on our books for these payments. I would think they would be considered a prepaid, but I also know prepaid expenses are non-admitted assets for STAT purposes. Are prepaid reinsurance treated any differently, or how should these be classified?

[Seth]

You are 100% correct in that these should be set up as a prepaid. They should be reported on write in line on Page 2. SSAP 62R does specify (par. 50) that theses prepaids are considered admitted assets.

[NicoleJ-HAIG]

Thank you so much for the quick responses Seth!!