Calculate Recoveries considering System Parameter Settings
System parameters will have the following effect on the Recovery Calculation: Refer to System Administration Guide for more information regarding_System Parameters._
Accounting - Miscellaneous #
Trace Source Business from Outward Bookings
Cleared: The system is performing recovery calculation without creating a link between the outward recovery booking detail, and the business identifier of the source booking.
When cleared, the system allows you to select the check box ‘Trace Source Business’ on the Business/Accounting Info tab of an Outward Cedent’s Contract or XL CA of Outward.
Refer to Trace Options section of the Handle Business Life Span chapter for more information about this check-box.
Selected: The system is performing recovery calculation by creating a link between the source booking business, and the outward recovery booking detail. The link to the source business is also transferred to the corresponding booking detail created on the Reinsurer Business Ledger.
The link can be inspected from the Business Ledger of an Outward Cedent’s Contract or Reinsurer:
- Open the Account Balances tab on the Business Ledger.
- Select the balance detail for which you want to see the link.
- Select the More Details Information option from the pop-up menu.
- Click the More Information tab: the system shows the Source Business
Identifier.
Trace Base Company from Outward Bookings
Cleared: The system is performing recovery calculation without creating a link between the outward recovery booking detail, and the base company of the source booking.
When cleared, the system allows you to select the check box ‘Trace Base Company’ on the Business tab of an Outward Cedent’s Contract or XL CA of Outward. Refer to the Trace Options section of the Handle Business Life Span chapter for more information about this check-box.
Selected: The system is performing recovery calculation by creating a link between the base company of the source booking, and the outward recovery booking detail. The link to the original base company is also transferred to the corresponding booking detail created on the Retrocessionaire Participants Business Ledger.
The link can be inspected from the Business Ledger of an Outward Cedent’s Contract or Retrocessionaire Participants:
- Open the Account Balances tab on the Business Ledger.
- Select the balance detail for which you want to see the link.
- Select the More Details Information option from the pop-up menu.
- Click the More Information tab: the system shows the Base Company information
Trace Responsible Partner from Outward Bookings
Cleared: The system is performing recovery calculation without creating a link between the outward recovery booking detail, and the original responsible partner of the source booking.
When cleared, the system allows you to select the check box ‘Trace Responsible Partner’ on the Business/Accounting Info tab of an Outward Cedent’s Contract or XL CA of Outward.
Refer to Trace Options section of the Handle Business Life Span chapter for more information about this check-box.
Selected: The system is performing recovery calculation by creating a link
between the responsible partner of the source booking, and the outward recovery booking detail. The link to the original responsible partner is also transferred to the corresponding booking detail created on the Reinsurer Business Ledger.
The link can be inspected from the Business Ledger of an Outward Cedent’s Contract or Reinsurers:
- Open the Account Balances tab on the Business Ledger.
- Select the balance detail for which you want to see the link.
- Select the More Details Information option from the pop-up menu.
- Click the More Information tab: the system shows the Responsible Partner information
Calculate VAT for Outward Non Proportional Retrocessionaires
SICS offers the possibility to automatically calculate Value Added Tax (VAT) for outward recoveries. The calculation is dependent on the system being set up to calculate VAT automatically, and that the system parameter VAT Calculation based on EC Groups is activated.
The calculation is done for all entry codes which are set up to have automatic VAT, and is performed when running automatic recovery and reinstatement calculation of any kind (via Protection Program, Single OCC and XL Fac).
For more information in respect of the set-up; contact your system administrator.
Accounting - Retrocession - Non Prop Retrocession #
Splitting Recoveries Proportionally considering Inward Details
SICS offers the opportunity to do a proportional split of recovery details based upon the inward claim. This enables a more proportionate allocation of the recoveries considering the origin of the booked claim. For example; if the From ground up loss has a 50%/50% split between two Accounting Classifications, the recoveries will be split accordingly.
Proportional split per accounting classification includes trace values for source business and original responsible partner as part of the proportional split.
Split Recoveries Proportionally On Accounting Classifications
Cleared: The system is splitting the Accounting Classification according to the first come first serve principle.
Selected: The recoveries are allocated to accounting classifications in the same proportion as they bear to the total from ground up loss.
Refer to examples in Recovery Calculation with Accounting Classification Split section in the appendix.
Split Recoveries Proportionally On Original Responsible Partner
Cleared: Responsible Partner from inward detail is traced in the recovery calculation according to first come first serve principle.
Selected: Dependent on the ‘Trace Option: Source Responsible Partner’ being activated at Outward Cedent’s Contract level, the recoveries are split in the same proportion as the traced details bear to the total from ground up loss.
Split Recoveries Proportionally On Source Business
Cleared: Source Business from inward detail is traced in the recovery calculation according to first come first serve principle.
Selected: Dependent on the ‘Trace Option: Source Business’ being activated at Outward Cedent’s Contract level, the recoveries are split in the same proportion as the traced details bear to the total from ground up loss.
Distribution Of Recovery Reserves Based On Incurred Figures
Cleared: Calculation of recoveries is done by allocating Paid Recoveries first, and thereafter adding the Recovery Reserves “on top” of the allocated paid figures. This calculation applies for both Claim Sequences and all Claim Basis.
Selected: This is an alternative calculation that is valid for Claim Sequence Date of Loss Order only. If this parameter is selected, Paid Recoveries is allocated first (as when parameter is off). Further allocation is made to Recovery Incurred. When allocating Recovery Reserves, the Incurred Figures get allocated, and from them Recovery Paid is deducted. If the Recovery Incurred is less than Recovery Paid, a negative reserve will be established.
Refer to examples in Recovery Calculation with Date of Loss Sequence section in the appendix.
Recovery Calculation for Multi Currency Protections Based On Incurred Currency Split
Cleared: The recoveries are allocated to the limit currencies in the same proportion as they bear to the total from ground up (FGU) loss. Paid recoveries are split into currencies according to the currency split of paid FGU loss. Recovery reserves are distributed “on the top”, using the currency split of the reserves FGU loss.
Selected: The recoveries are allocated to the limit currencies in the same proportion as they bear to the total from ground up (FGU) loss. Paid recoveries are split into currencies according to the Currency split of paid FGU-loss. The currency split of Recovery Reserves is calculated as the currency split of Recovery incurred (using the currency split of incurred FGU loss) less currency split of Recovery paid (using the currency split of paid FGU loss).
Refer to examples in Recovery Calculation for Protection with Multiple Limit Currencies section in the appendix.
Include ACR in Recovery Calculation
Cleared: Additional Case Reserve (ACR) is not included in recovery calculation for Outward Non-Proportional Protections.
Selected: Recovery Calculation order includes Additional Case Reserve (ACR), calculate it per Outward Claim, and it is distributed to the retrocessionaires according to exisiting recovery functionality. ACR Expense is also included, and is calculated according to Original Assumed Expense settings.
Refer to examples in Recovery Calculation with Additional Case Reserves section in the appendix.