Reinsurance Accounting: Schedule F

Schedule F discloses an insurer’s reinsurance transactions, for both ceded business and assumed business. Schedule F is one of the most complex schedules in the Annual Statement, and it has been extensively revised each year since 1989. Reinsurance transactions are an important consideration in monitoring a company’s financial strength, as demonstrated by the emphasis on reinsurance arrangements and collectivity in the NAIC Statement of Actuarial Opinion and in the Canadian Report of the Actuary. Yet the lack of clear instructions for many sections of Schedule F makes it difficult to accurately complete the exhibits. This paper explains the structure and purposes of Schedule F, as well as the relationship of the Schedule to other statutory statements. Particular emphasis is placed on the complex additions to the Schedule in recent years, such as the restatement of the balance sheet in Part I and the statutory "provisions" for overdue reinsurance recoverables and for recoverables from "slowpaying" reinsurers in Parts 6 and 7.