Previously and as a temporary accommodation in view of the financial impact, the Insurance Commission, in a letter dated December 29, 2016, to the Philippine Insurers and Reinsurers Association (Pira), provided a relaxed implementation: 'For 2017, companies shall be allowed to set up as Premium Liabilities the Unearned Premium
Reserves instead of the higher of the UPR and the unexpired risk reserves [URR] where the UPR is determined in accordance with Section 7.2 of the said Circular.
Again, in the contract State Farm expressly reserved the right to accept late installment payments without reinstating coverage retroactively, declaring that any "[d]elay [by State Farm] in the return of any unearned premium
does not affect the cancellation date." At best, Starr-Haller has demonstrated that she is entitled to a refund from State Farm for those unearned premium
payments, but she has not demonstrated that she is entitled to coverage.
These surplus lines companies would be required to post a deposit equal to the unearned premium
, net of unearned commissions, on the assumed policies.
Technical profit decreased by 3 per cent from BD2.27 million to BD2.21 million due to the change in unearned premium
reserve method of calculation, which is more accurate and reliable.
Another large liability that should be monitored for adequacy is unearned premium
, which has been falling overall due to the recent lower level of written premiums compared with earned premiums.
58, "When the anticipated losses, loss adjustment expenses, commissions and other acquisition costs, and maintenance costs exceed the recorded unearned premium
reserve, contingency reserve, and the estimated future renewal premium on existing policies, a premium deficiency reserve shall be recognized by recording an additional liability for the deficiency with a corresponding charge to operations."
The unearned premium
revenue represents the insurance enterprise's stand-ready obligation under a financial guarantee insurance contrast at initial recognition.
The recognition approach for a claim liability relating to a financial guarantee insurance contract requires that an insurance enterprise recognize a claim liability when the insurance enterprise expects, based on the present value of expected net cash outflows to be paid under the insurance contract discounted using a risk-free rate, that a claim loss will exceed the unearned premium
Additionally, FASB hopes for comment on use of cash flow accounting for both short-duration and long-duration contracts, rather than the unearned premium
method for short-duration contracts and the lock-in method for long-duration contracts.
#3 = (Surplus Aid) Less than 15% Surplus Aid to (Policyholders' Surplus) Surplus Ratio Note: Surplus aid is equal to the ceding commissions ratio multiplied by ceded reinsurance unearned premium
Return of any unearned premium
will be calculated on the customary short rate basis if the Insured cancels and on a pro-rata basis if the Company cancels this Policy.
More important, "debt" capital in the form of unearned premium
reserves and loss reserves increased by $394 billion!