Recovery Calculation in Original Currency
Protection:
Insured Period: 01.01.09 - 31.12.09
Limit Conditions:
Cover: EUR 50.000.000
Excess: EUR 5.000.000
Claim Basis:Losses occurring
Assumed Claim with Booking Details:
| As of Date | Entry Code | Currency | Amount |
|---|---|---|---|
| 01.01.09 | Paid Loss | EUR | 6.000.000 |
| 31.01.09 | Paid Loss | GBP | 1.000.000. |
| 20.02.09 | Paid Loss | USD | 5.000.000 |
| 20.02.09 | Loss Reserves | USD | 5.000.000 |
Daily Exchange Rate in SICS:
| Currency | Date | Rate |
|---|---|---|
| GBP to EUR | 31.01.09 | 0.65 |
| USD to EUR | 31.01.09 | 1.5 |
| USD to EUR | 31.03.09 | 1.4 |
Run Recovery Calculation as per Month 3, 2009:
Assumption: The Original Currency Recovery check-box is activated on the protection.
System creates bookings in OCC limit currency:
| WKS ID | Entry Code | Currency | Amount |
|---|---|---|---|
| WKSXX1 | Recovery Paid | EUR | 5.871.795 |
| WKSXX1 | Recovery Reserves | EUR | 3.571.429 |
System reverses the bookings in limit currency and creates recovery bookings in original currency:
| WKS ID | Entry Code | Currency | Amount |
|---|---|---|---|
| WKSXX2 | Recovery Paid | EUR | - 5.871.795 |
| WKSXX2 | Recovery Reserves | EUR | - 3.571.429 |
| WKSXX2 | Recovery Paid | EUR | 1.000.000 |
| WKSXX2 | Recovery Paid | GBP | 1.000.000 |
| WKSXX2 | Recovery Paid | USD | 5.000.000 |
| WKSXX2 | Recovery Reserves | USD | 5.000.000 |
SICS uses the exchange rate as per the As of Date for allocating the paid recoveries to original currency and the most recent daily rate for allocating the reserve recoveries:
Paid Recovery in EUR: 6.000.000 + (1.000.000/0.65) + (5.000.000/1.5) = 10.871.795
Reserve Recovery in EUR: 5.000.000/1.4 = 3.571.429