Calculate Portfolio
If you want the SICS to calculate the Portfolio, the conditions must be defined. (Refer to Portfolio conditions.) Conditions must be equal for all Retrocessionaire’s (no special Portfolio condition).
Calculate Premium Portfolio #
Premium Portfolio Withdrawal, if defined, is calculated and booked when you run the last Account of an Insured Period. Note that a year must be entered in the field ‘Last Accounting Year’ on the Administration Conditions of the OCC when Premium Accounting Basis ‘Run-Off’, if not, no Portfolio is booked to the ORP.. If the business is renewed, a Premium Portfolio Entry is booked on the next open Insured Period. Premium Portfolio Entry is also calculated and booked on the Business Ledger of new Retrocessionaires' (participating in the next open Insured Period).
Note! If the condition is Percent of Original, and you run the first Account of the first Insured Period of the Outward Cedent’s Contract (OCC), the Premium Portfolio Entry will be booked. Thereafter, the Premium Portfolio Withdrawal/Premium Portfolio Entry is booked only when you run the last Account of the Insured Period.
Available calculation methods are;
None
No calculation of Premium Portfolio Withdrawal/Premium Portfolio Entry is performed
Percent of Original
All bookings with Entry Codes within the Entry Code Sub Category Premium Portfolio Withdrawal are multiplied with the Share of the Retrocessionaire’s and the percentage entered on the Premium Portfolio Withdrawal condition. All bookings with Entry Codes within the Entry Code Sub Category Premium Portfolio Entry are multiplied with the Share of the Retrocessionaire’s and the percentage entered on the Premium Portfolio Entry condition (entered on the next open Insured Period). The result of the calculations is booked on the Business Ledger As Booking with the original Entry Codes.
Which Entry Codes are parts of the Entry Code Sub Categories_Premium Portfolio Withdrawal_ and_Premium Portfolio Entry_ is decided by your System Administrator.
Example:
Retrocessionaire’s Share in Insured Period 2002 = 10%
Retrocessionaire’s Share in Insured Period 2003 = 20%
Premium Portfolio Withdrawal/Entry = 90% of Original
Account selected = 4th quarter 2002
| Business Ledger OCC ‘As Booking’ |
Business Ledger ORP ‘As Booking’ |
|||
|---|---|---|---|---|
| Entry Code | Amount | IP | Entry Code | Amount |
| *)14 | 40.000 | 2002 | 14 | 3.600 |
| *)PTFW | 80.000 | 2002 | PTFW | 7.200 |
| **) 13 | -40.000 | 2003 | 13 | -7.200 |
| **) PTFE | -80.000 | 2003 | PTFE | -14.400 |
*) Entry Codes in Entry Code Sub Category Premium Portfolio Withdrawal
******) Entry Codes in Entry Code Sub Category Premium Portfolio Entry. Bookings with this Entry Code are made on the 1 st Quarter Account 2003.
Percent of Premium
All Premium bookings according to the Entry Code Group selected on the condition are multiplied with the Share of the Retrocessionaire’s and the Premium Portfolio Withdrawal percentage. For calculating the Premium Portfolio Entry the condition for the next open Insured Period is used. The results of the calculations are booked on the Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Portfolio Withdrawal/Premium Portfolio Entry.
Note! Premium Portfolio Withdrawal is calculated of the cumulated Premium of the lastAccounting Year of the Insured Period. The Premium Portfolio Entry (for the next Insured period) is calculated using the cumulated Premium of the last Accounting Year of the previous Insured Period (= same amount as used as basis for calculating the Premium Portfolio Withdrawal).
Which Entry Codes is part of the Entry Code Group within the Entry Code Group Category Subject Premium Income; Proportional is decided by your System Administrator.
Example 1:
Entry Code defined for Calculation Premium Portfolio Withdrawal = ‘14’
Entry Code defined for Calculation Premium Portfolio Entry = ‘13’
Retrocessionaire’s Share = 10% in Insured Period 2002
Retrocessionaire’s Share = 20% in Insured Period 2003
Premium Portfolio Withdrawal/Entry = 50% of Premium (‘10’ + ‘PREM’)
Premium Accounting Basis = ‘Clean Cut’
| Business Ledger OCC ‘As Booking’ |
Business Ledger ORP ‘As Booking’ |
|||
|---|---|---|---|---|
| Entry Code | Amount | IP | Entry Code | Amount |
| *)10 | -50.000 | 2002 | 10 | -5.000 |
| *)PREM | -200000 | 2002 | PREM | -20.000 |
| 2002 | **)14 | 12.500 | ||
| 2003 | **)13 | -25.000 |
*) Entry Codes in Entry Code Sub Category Premium
) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Subject Premium Income, Proportional (In this example10** and **PREM**).The Premium Portfolio Entry is booked on the first Account, next Accounting Year, next Insured Period.
Example 2:
Entry Code defined for Calculation Premium Portfolio Withdrawal = ‘14’
Entry Code defined for Calculation Premium Portfolio Entry = ‘13’
Retrocessionaire’s Share = 10% in Insured Period 2002
Retrocessionaire’s Share = 20% in Insured Period 2003
Premium Portfolio Withdrawal/Entry = 50% of Premium (‘10’ + ‘PREM’)
Premium Accounting Basis = ‘Run-off’
Insured Period 2002 - last Accounting Year = 2003
Insured period 2003 - last Accounting Year = 2004
| Business Ledger OCC ‘As Booking’ |
Business Ledger ORP ‘As Booking’ |
||||
|---|---|---|---|---|---|
| Entry Code | Amount | AC-YR | IP | Entry Code | Amount |
| Yearly 2002 Account; | |||||
| *)10 | -50.000 | 2002 | 2002 | 10 | -5.000 |
| *)PREM | -200000 | 2002 | 2002 | PREM | -20.000 |
| Yearly 2003 Account; | |||||
| *)10 | -20.000 | 2003 | 2002 | 10 | -2.000 |
| *)PREM | -50.000 | 2003 | 2002 | PREM | -5.000 |
| *)10 | -100.000 | 2003 | 2003 | 10 | -20.000 |
| *)PREM | -300.000 | 2003 | 2003 | PREM | -60.000 |
| 2003 | 2002 | **)14 | 3.500 | ||
| 2004 | 2003 | **)13 | -7.000 |
*) Entry Codes in Entry Code Sub Category Premium
) The Premium Basis is dependent on the definition of the selected Entry Code Group. Refer to Category Subject Premium Income, Proportional (In this example10** and **PREM**). Only the **Premium** booked on IP 2002, Accounting Year 2003 is used as basis for the Premium Portfolio Withdrawal/Entry calculation. Note that the Premium Portfolio Entry is booked on the first Account, next Accounting Year/next Insured Period.
Percent of Reserve
All Premium Reserve bookings, within the Entry Code Sub Category Original Premium Reserve, booked on the Retrocessionaire’s are multiplied with the percentage entered on the Premium Portfolio Withdrawal condition. For calculating the Premium Portfolio Entry, the condition for the next open Insured Period is used. The result of the calculation is booked on the Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Portfolio Withdrawal/Premium Portfolio Entry.
Note! Premium Reserve (within the Entry Code Sub Category Original Premium Reserve) previously booked on the Retrocessionaire’s Business Ledger is reversed when booking the Premium Portfolio Withdrawal. In the last Account of the Insured Period, there is no booking of the Premium Reserve, but the Premium Reserve is included in the calculation basis of the Premium Portfolio.
Which Entry Codes is part of the Entry Code Sub Category Original Premium Reserve is decided by your System Administrator.
Example:
Retrocessionaire’s Share = 10% in Insured Period 2002, 20% in 2003
Premium Portfolio Withdrawal/Entry = 90% of Reserve
Premium Accounting Basis = ‘Clean Cut’
Entry Code defined for Calculation Premium Portfolio Withdrawal = ‘14’
Entry Code defined for Calculation Premium Portfolio Entry = ‘13’
| Business Ledger OCC ‘As Booking’ |
Business Ledger ORP ‘As Booking’ |
*nbsp; | |||
|---|---|---|---|---|---|
| Entry Code | Amount | AC-YR | IP | Entry Code | Amount |
| 1st Half-year 2002 Account; | |||||
| *)81 | **)100.000 | 2002 | 2002 | 81 | 10.000 |
| 2nd Half-year 2002 Account; | |||||
| *)81 | **)50.000 | 2002 | 2002 | ***)81 | -10.000 |
| 2002 | 2002 | ****)14 | 13.500 | ||
| 2003 | 2003 | *****)13 | -27.000 |
*) Entry Codes in Entry Code Sub Category Original Premium Reserve
**) Original Premium Reserve - calculation basis for Premium Reserve on Retrocessionaire’s Business Ledger >> basis for Premium Portfolio
***) Premium Reserve previously booked for the IP is reversed in last Account due to booking of Premium Portfolio Withdrawal.
****) (10.000 + 5.000) x 90% = 13.500
*****) (10.000 + 5.000) x 20/10 x 90% = 27.000 x -1 (portfolio entry adjusted for increased share 10% >> 20%)
Original Portfolio + Percent of Reserve
The Premium Portfolio Withdrawal/Premium Portfolio Entry booked on the OCC ‘as booking’ Business Ledger is multiplied with the share of the Retrocessionaire’s entered on the Insured Period to be closed/next open Insured Period.
In addition, the Premium Reserve (Entry Codes within the Entry Code Sub Category Original Premium Reserve) booked on the Retrocessionaire’s Business Ledger is multiplied with the percentage from the Premium Portfolio Withdrawal/Premium Portfolio Entry condition.
The result of the calculation is booked on the Retrocessionaire’s Business Ledger As Booking. The Entry Code defined in the system parameter Entry Code Usage, Calculation Premium Portfolio Withdrawal/Premium Portfolio Entry is used. In addition the original Entry Code(s) is used if different from the one defined in the system parameter.
Example:
Retrocessionaire’s Share = 10% in Insured Period 2002/2003
Premium Portfolio Withdrawal/Entry = Original + 90% of Reserve
_ Premium Accounting Basis = **‘Clean Cut’_**
Entry Code defined for Calculation _Premium Portfolio Withdrawal =_ ‘14’
Entry Code defined for Calculation _Premium Portfolio Entry =_ ‘13’
| Business Ledger | |||||
|---|---|---|---|---|---|
| OCC ‘As Booking’ | ORP ‘As Booking’ | ||||
| Entry Code | Amount | AC-YR | IP | Entry Code | Amount |
| 1st Half-year 2002 Account; | |||||
| *)81 | 100.000 | 2002 | 2002 | 81 | 10.000 |
| 2nd Half-year 2002 Account; | |||||
| *)81 | 50.000 | 2002 | 2002 | ***)81 | -10.000 |
| **)14 | 40.000 | 2002 | 2002 | ****)14 | 17.500 |
| **)PTFW | 80.000 | 2002 | 2002 | PTFW | 8.000 |
| **)13 | -40.000 | 2003 | 2003 | 13 | -17.500 |
| **)PTFE | -80.000 | 2003 | 2003 | PTFE | -8.000 |
*) Entry Code within Entry Code Sub Category Original Premium Reserve. The amount booked with this code is the basis for calculating the Premium Portfolio calculated as a percent of the Reserve.
**)Entry Codes within Entry Code Sub Category Premium Portfolio Withdrawal (14, PTFW) and Premium Portfolio Entry (13, PTFE)
***) Premium Reserve previously booked for the IP is reversed in last Account due to booking of Premium Portfolio Withdrawal
****) ((-40.000 x 10%) x -1) + ((100.000 + 50.000) x 10% x 90%) = 17.500
Calculate Premium Portfolio Entry based on Quota Share percentage #
It is possible to have the Premium Portfolio Entry adjusted by the Quota Share percentage defined for the opening Insured Period compared to the Quota Share percentage defined for the current Insured Period. This is possible by selecting the field ‘Calculate based on Quota Share Percentage’ on the OCC, Business tab, Accounting Info. When this option is selected, the Premium Portfolio Entry for the next open Insured Period is multiplied with the Quota Share Percent registered for the same Insured Period divided by the Quota Share Percent for the current Insured Period (Refer to Premium/Limit Conditions, Limit Quota Share)
Example when Quota Share Percent changed from one Insured Period to the next;
Calculate based on Quota Share Percentage = selected
Quota Share Percent 2018 = 25% and 2019 = 15%
Premium Portfolio = 35% of Gross Premium
ORP, Gross Premium amount 2018 = -1.000
Running the Account 4th of 4, 2018;
Premium Portfolio Withdrawal = -1.000 * 35% * -1 = 350
Premium Portfolio Entry = -1.000 * 35% * 15/25 = -210
Note! Calculate Premium Portfolio Entry based on Quota Share percentage is available only when Proportional Treaty OCC is with Type of Participation Quota Share and the Premium Accounting Basis is Clean Cut.
Manage Premium Portfolio as Reserve #
This calculation method is enabled when you select the Manage Portfolio as Reserve check box on the Premium Portfolio Condition. The functionality applies only when Premium Accounting Basis is Clean Cut. Available calculation methods when Manage Portfolio as Reserve is selected are Percent of Premium and Percent of Original. If selected, the calculation is according to the following rules;
Premium Portfolio Withdrawal is booked as Reserve. Premium Portfolio Entry is calculated and booked only if the Retrocessionaire’s Share and /or the Premium Portfolio condition /Premium Portfolio amount is changed from one Insured Period to the next. If the Share/Premium Portfolio amount is increased, an ordinary Premium Portfolio Entry is booked on the next Insured Period. If the Share/Premium Portfolio amount is reduced, a Premium Portfolio Entry with reversedsign is booked on the next Insured Period. The Premium Portfolio Entry is only calculated for the Share percentage difference from one Insured period to the next. Premium Portfolio Withdrawal is calculated and booked only when the Retrocessionaire’s is ending his participation (not renewed to the next Insured Period). Note! The Premium Reserve booked in the last Account of the Insured Period when selecting Manage Portfolio as Reserve is not automatically reversed. It is the user’s responsibility to manually adjust this reserve.
Percent of Premium/Percent of Original
For more information regarding calculation of Premium Portfolio when calculated as a percent of Premium/Original, refer to sections Percent of Premium and_Percent of Original_ in the _Calculate Premium Portfolio_ chapter.
Example 1 - when change in Share condition:
Manage Portfolio as Reserve = selected
Premium Accounting Basis = ‘Clean Cut’
Premium Portfolio Withdrawal/Entry = 30% of Premium
Retrocessionaire’s 1 Share = 25% in IP 2002, 25% in IP 2003 (=unchanged)
Retrocessionaire’s 2 Share = 25% in IP 2002, 55% in IP 2003 (= increased)
Retrocessionaire’s 3 Share = 25% in IP 2002, 20% in IP 2003 (= reduced)
Retrocessionaire’s 4 Share = 25% in IP 2002, not participating in 2003
Entry Code defined for Calculation Premium Portfolio Withdrawal = ‘14’
Entry Code defined for Calculation Premium Portfolio Entry = ‘13’
Entry Code defined for Calculation Premium Reserve = ‘81’
| Business Ledgers | |||||||
|---|---|---|---|---|---|---|---|
| OCC ‘as booking’ | RP1 | RP2 | RP3 | RP4 | |||
| Ins. Per. | Entry Code | Amount | 02: 25% 03: 25% |
02: 25% 03: 55% |
02: 25% 03: 20% |
02: 25% 03: —– |
|
| 2002 | 10 | -200.000 | -50.000 | -50.000 | -50.000 | -50.000 | |
| 2002 | 81 | 15.000 | 15.000 | 15.000 | |||
| 2002 | 14 | 15.000 | |||||
| 2003 | 13 | *-18.000 | ** 3.000 |
*) Calculated as ((-200.000 x 25% x 30%) - (-200.000 x 55% x 30%) x -1) = -18.000
**) Calculated as ((-200.000 x 25% x 30%) - (-200.000 x 20% x 30%) x -1) = 3.000
Example 2 - when change in Premium Portfolio condition => increased figure:
Manage Portfolio as Reserve = selected
Premium Accounting Basis = ‘Clean Cut’
Premium Portfolio Withdrawal = 30% of Premium
Premium Portfolio Entry = 40% of Premium
Retrocessionaire’s 1, 2, 3, 4 Share = 25% in IP 2002, 25% in IP 2003 (=unchanged)
Entry Code defined for Calculation Premium Portfolio Withdrawal = ‘14’
Entry Code defined for Calculation Premium Portfolio Entry = ‘13’
Entry Code defined for Calculation Premium Reserve = ‘81’
| Business Ledgers | |||||||
|---|---|---|---|---|---|---|---|
| OCC ‘as booking’ | RP1 | RP2 | RP3 | RP4 | |||
| Ins. Per. | Entry Code | Amount | 02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
|
| 2002 | 10 | -200.000 | -50.000 | -50.000 | -50.000 | -50.000 | |
| 2002 | 81 | 15.000 | 15.000 | 15.000 | 15.000 | ||
| 2002 | 14 | ||||||
| 2003 | 13 | *)-5.000 | *)-5.000 | *)-5.000 | *)-5.000 |
*) Calculated as ((-50.000 x 30%) - (-50.000 x 40%) x -1) = - 5.000.
Example3- when change in Premium Portfolio condition => **reduced figure:
** Manage Portfolio as Reserve = selected
Premium Accounting Basis = ‘Clean Cut’
Premium Portfolio Withdrawal = 40% of Premium
Premium Portfolio Entry = 30% of Premium
Retrocessionaire’s 1, 2, 3, 4 Share = 25% in IP 2002, 25% in IP 2003 (=unchanged)
Entry Code defined for Calculation Premium Portfolio Withdrawal = ‘14’
Entry Code defined for Calculation Premium Portfolio Entry = ‘13’
Entry Code defined for Calculation Premium Reserve = ‘81’
| Business Ledgers | |||||||
|---|---|---|---|---|---|---|---|
| OCC ‘as booking’ | RP1 | RP2 | RP3 | RP4 | |||
| Ins. Per. | Entry Code | Amount | 02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
|
| 2002 | 10 | -200.000 | -50.000 | -50.000 | -50.000 | -50.000 | |
| 2002 | 81 | 15.000 | 15.000 | 15.000 | 15.000 | ||
| 2002 | 14 | ||||||
| 2003 | 13 | *)5.000 | *)5.000 | *)5.000 | *)5.000 |
*) Calculated as ((-50.000 x 40%) - (-50.000 x 30%) x -1)= 5.000.
Calculate Loss Portfolio #
Loss Portfolio Withdrawal, if defined, is calculated and booked when you run the last Account of an Insured Period. Note that a year must be entered in the field ‘Last Accounting Year’ on the Administration Conditions of the OCC when Claim Accounting Basis ‘Run-Off’, if not, no Portfolio is booked to the ORP. If the business is renewed, a Loss Portfolio Entry is booked on the next open Insured Period. Loss Portfolio Entry is also calculated and booked on the Business Ledger of new Retrocessionaires (participating in the next open Insured Period).
Note! If the condition is Percent of Original, and you run the first Account of the first Insured Period of the Outward Cedent’s Contract (OCC), the Loss Portfolio Entry will be booked. Thereafter, the Loss Portfolio Withdrawal/Loss Portfolio Entry is booked only when you run the last Account of the Insured Period
Available calculation methods are;
None
No calculation of Loss Portfolio Withdrawal/Loss Portfolio Entry is performed
Percent of Original
All bookings with Entry Codes within the Entry Code Sub Category Loss Portfolio Withdrawal are multiplied with the Share of the Retrocessionaire’s and the percentage entered on the Loss Portfolio Withdrawal condition. All bookings with Entry Codes within the Entry Code Sub Category Loss Portfolio Entry are multiplied with the Share of the Retrocessionaire’s and the percentage entered on the Loss Portfolio Entry condition (entered on the next open Insured Period). The results of the calculations are booked on the Business Ledger As Booking with the original Entry Codes.
Which Entry Codes are parts of the Entry Code Sub Categories Loss Portfolio Withdrawal and_Loss PortfolioEntry_ is decided by your System Administrator.
Example:
Retrocessionaire’s Share in Insured Period 2002 = 10%
Retrocessionaire’s Share in Insured Period 2003 = 20%
Loss Portfolio Withdrawal/Entry = 90% of Original
Account selected = 4th quarter 2002
| Business Ledger OCC ‘As Booking’ |
Business Ledger ORP ‘As Booking’ |
||||
|---|---|---|---|---|---|
| Entry Code | Amount | Ins. Per. | Entry Code | Amount | |
| *)36 | 40.000 | 2002 | 36 | 3.600 | |
| *)LPFW | 80.000 | 2002 | LPFW | 7.200 | |
| **) 35 | -40.000 | 2003 | 35 | -7.200 | |
| **) LPFE | -80.000 | 2003 | LPFE | -14.400 |
*) Entry Codes in Entry Code Sub Category Loss Portfolio Withdrawal
******) Entry Codes in Entry Code Sub Category Loss Portfolio Entry. Bookings with this Entry Code are made on the 1 st Quarter Account 2003.
Percent of Reserve
All Loss Reserve bookings, within the Entry Code Sub Category Original Loss Reserve, booked on the Retrocessionaire’s are multiplied with the percentage entered on the Loss Portfolio Withdrawal condition. For calculating the Loss Portfolio Entry, the condition for the next open Insured Period is used. The result of the calculation is booked on the Business Ledger As Booking with the Entry Code defined in the system parameter Entry Code Usage, Calculation Loss Portfolio Withdrawal/Loss Portfolio Entry.
Note! Loss Reserve (within the Entry Code Sub Category Original Loss Reserve) previously booked on the Retrocessionaire’s Business Ledger is reversed when booking the Loss Portfolio Withdrawal. In the last Account of the Insured Period, there is no booking of the Loss Reserve, but the Loss Reserve is included in the calculation of the Loss Portfolio.
Which Entry Codes is part of the Entry Code Sub Category Original Loss Reserve is decided by your System Administrator.
Example
Retrocessionaire’s Share = 10% in Insured Period 2002, 20% in 2003
Loss Portfolio Withdrawal/Entry = 90% of Reserve
Loss Accounting Basis = ‘Clean Cut’
Entry Code defined for Calculation Loss Portfolio Withdrawal = ‘36’
Entry Code defined for Calculation Loss Portfolio Entry = ‘35’
| Business Ledger OCC ‘As Booking’ |
Business Ledger ORP ‘As Booking’ |
||||
|---|---|---|---|---|---|
| Entry Code | Amount | AC-YR | IP | Entry Code | Amount |
| 1st Half-year 2002 Account; | |||||
| *)83 | **)100.000 | 2002 | 2002 | 83 | 10.000 |
| 2nd Half-year 2002 Account; | |||||
| *)83 | **)50.000 | 2002 | 2002 | ***)83 | -10.000 |
| 2002 | 2002 | ****)36 | 13.500 | ||
| 2003 | 2003 | *****)35 | -27.000 |
*) Entry Codes in Entry Code Sub Category Original Loss Reserve
**) Original Loss Reserve - calculation basis for Loss Reserve on Retrocessionaire’s Business Ledger >> basis for Loss Portfolio
***) Loss Reserve previously booked for the IP is reversed in last Account due to booking of Loss Portfolio Withdrawal.
****) (10.000 + 5.000) x 90% = 13.500
*****) (10.000 + 5.000) x 20/10 x 90% = 27.000 x -1 (portfolio entry adjusted for increased share 10% >> 20%)
Original Portfolio + Percent of Reserve
The Loss Portfolio Withdrawal/Loss Portfolio Entry booked on the OCC ‘as booking’ Business Ledger is multiplied with the share of the Retrocessionaire’s entered on the Insured Period to be closed/next open Insured Period.
In addition, the Loss Reserve (Entry Codes within the Entry Code Sub Category Original Loss Reserve) booked on the Retrocessionaire’s Business Ledger is multiplied with the percentage from the Loss Portfolio Withdrawal/Loss Portfolio Entry condition.
The result of the calculation is booked on the Retrocessionaire’s Business Ledger As Booking. The Entry Code defined in the system parameter Entry Code Usage, Calculation Loss Portfolio Withdrawal/Loss Portfolio Entry is used. In addition the original Entry Code(s) is used if different from the one defined in the system parameter.
Example:
Retrocessionaire’s Share = 10% in Insured Period 2002/2003
Loss Portfolio Withdrawal/Entry = Original + 90% of Reserve
_ Loss Accounting Basis = **‘Clean Cut’_**
Entry Code defined for Calculation _Loss Portfolio Withdrawal =_ ‘36’
Entry Code defined for Calculation _Loss Portfolio Entry =_ ‘35’
| Business Ledger | |||||
|---|---|---|---|---|---|
| OCC ‘As Booking’ | ORP ‘As Booking’ | ||||
| Entry Code | Amount | AC-YR | Ins. Per. | Entry Code | Amount |
| 1st Half-year 2002 Account; | |||||
| *)83 | 100.000 | 2002 | 2002 | 83 | 10.000 |
| 2nd Half-year 2002 Account; | |||||
| *)83 | 50.000 | 2002 | 2002 | ***)83 | -10.000 |
| **)36 | 40.000 | 2002 | 2002 | ****)36 | 17.500 |
| **)LPFW | 80.000 | 2002 | 2002 | LPFW | 8.000 |
| **)35 | -40.000 | 2003 | 2003 | 35 | -17.500 |
| **)LPFE | -80.000 | 2003 | 2003 | LPFE | -8.000 |
*) Entry Code within Entry Code Sub Category Original Loss Reserve. The amount booked with this code is the basis for calculating the Loss Portfolio calculated as a percent of the Reserve.
**) Entry Codes within Entry Code Sub Category Loss Portfolio Withdrawal (36, LPFW) and Loss Portfolio Entry (35, LPFE)
***) Loss Reserve previously booked for the IP is reversed in last Account due to booking of Loss Portfolio Withdrawal
****) ((40.000 x 10%) x -1) + ((100.000 + 50.000) x 10% x 90% = 17.500
Calculate Loss Portfolio Entry based on Quota Share percentage #
It is possible to have the Loss Portfolio Entry adjusted by the Quota Share percentage defined for the opening Insured Period compared to the Quota Share percentage defined for the current Insured Period. This is possible by selecting the field ‘Calculate based on Quota Share Percentage’ on the OCC, Business tab, Accounting Info. When this option is selected, the Loss Portfolio Entry for the next open Insured Period is multiplied with the Quota Share Percent registered for the same Insured Period divided by the Quota Share Percent for the current Insured Period (Refer to Premium/Limit Conditions, Limit Quota Share)
Example when Quota Share Percent changed from one Insured Period to the next;
Calculate based on Quota Share Percentage = selected
Quota Share Percent 2018 = 25% and 2019 = 15%
Loss Portfolio = 90% of Loss Reserve
ORP, Loss Reserve amount 2018 = 1.000
Running the Account 4th of 4, 2018;
Loss Portfolio Withdrawal = 1.000 * 90% = 900
Loss Portfolio Entry = -1.000 * 90% * 15/25 *-1 = -540
Note! Calculate Loss Portfolio Entry based on Quota Share percentage is available only when Proportional Treaty OCC is with Type of Participation Quota Share and the Loss Accounting Basis is Clean Cut.
Manage Loss Portfolio as Reserve #
This calculation method is enabled when you select the Manage Portfolio as Reserve check box on the Loss Portfolio Condition. The functionality applies only when Loss Accounting Basis is Clean Cut. Available calculation method when Manage Portfolio as Reserve is selected is Percent of Original. If selected, the calculation is according to the following rules;
Loss Portfolio Withdrawal is booked as Reserve. Loss Portfolio Entry is calculated and booked only if the Retrocessionaire’s Share and /or the Loss Portfolio condition /Loss Portfolio amount is changed from one Insured Period to the next. If the Share/Loss Portfolio amount is increased, an ordinary Loss Portfolio Entry is booked on the next Insured Period. If the Share/Loss Portfolio amount is reduced, a Loss Portfolio Entry with reversedsign is booked on the next Insured Period. The Loss Portfolio Entry is only calculated for the Share percentage difference from one Insured period to the next
Loss Portfolio Withdrawal is calculated and booked only when the Retrocessionaire’s is ending his participation (not renewed to the next Insured Period). Note! The Loss Reserve booked in the last Account of the Insured Period when selecting Manage Portfolio as Reserve is not automatically reversed. It is the user’s responsibility to manually adjust this reserve.
Percent of Original
For more information regarding calculation of Loss Portfolio when calculated as a percent of Original, refer to section Percent of Original in the Calculate Loss Portfolio chapter.
Example 1 - when change in Share condition:
Manage Portfolio as Reserve = selected
Loss Accounting Basis = ‘Clean Cut’
Loss Portfolio Withdrawal/Entry = 50% of Original
Retrocessionaire’s 1 Share = 25% in IP 2002, 25% in IP 2003 (=unchanged)
Retrocessionaire’s 2 Share = 25% in IP 2002, 55% in IP 2003 (= increased)
Retrocessionaire’s 3 Share = 25% in IP 2002, 20% in IP 2003 (= reduced)
Retrocessionaire’s 4 Share = 25% in IP 2002, not participating in 2003
Entry Code defined for Calculation Loss Portfolio Withdrawal = ‘36’
Entry Code defined for Calculation Loss Portfolio Entry = ‘35’
Entry Code defined for Calculation Loss Reserve = ‘83’
| Business Ledgers | ||||||
|---|---|---|---|---|---|---|
| OCC ‘as booking’ | RP1 | RP2 | RP3 | RP4 | ||
| Ins. Per. | Entry Code | Amount | 02: 25% 03: 25% |
02: 25% 03: 55% |
02: 25% 03: 20% |
02: 25% 03: —– |
| 2002 | 36 | 80.000 | 10.000 | |||
| 2002 | 81 | 10.000 | 10.000 | 10.000 | ||
| 2003 | 35 | -80.000 | *-12.000 | **2.000 |
*) Calculated as ((80.000 x 25% x 50%) - (-80.000 x 55% x 50%) x -1) = -12.000
**) Calculated as ((80.000 x 25% x 50%) - (-80.000 x 20% x 50%)x -1) = 2.000
Example 2 - when change in Loss Portfolio condition => increased figure:
Manage Portfolio as Reserve = selected
Loss Accounting Basis = ‘Clean Cut’
Loss Portfolio Withdrawal = 50% of Original
Loss Portfolio Entry = 70% of Original
Retrocessionaire’s 1, 2, 3, 4 Share = 25% in IP 2002, 25% in IP 2003 (=unchanged)
Entry Code defined for Calculation Loss Portfolio Withdrawal = ‘36’
Entry Code defined for Calculation Loss Portfolio Entry = ‘35’
Entry Code defined for Calculation Loss Reserve = ‘83’
| Business Ledgers | ||||||
|---|---|---|---|---|---|---|
| OCC ’s booking' | RP1 | RP2 | RP3 | RP4 | ||
| Ins. Per. | Entry Code | Amount | 02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
| 2002 | 36 | 80.000 | ||||
| 2002 | 81 | 10.000 | 10.000 | 10.000 | 10.000 | |
| 2003 | 35 | -80.000 | *)-4.000 | *)-4.000 | *)-4.000 | *)-4.000 |
*) Calculated as ((80.000 x 25% x 50%) - (-80.000 x 25% x70%) x -1) = - 4.000
Example 3 - when change in Loss Portfolio amount => reduced figure:
Manage Portfolio as Reserve = selected
Loss Accounting Basis = ‘Clean Cut’
Loss Portfolio Withdrawal = 50% of Original
Loss Portfolio Entry = 50% of Original
Retrocessionaire’s 1, 2, 3, 4 Share = 25% in IP 2002, 25% in IP 2003 (=unchanged)
Entry Code defined for Calculation Loss Portfolio Withdrawal = ‘36’
Entry Code defined for Calculation Loss Portfolio Entry = ‘35’
Entry Code defined for Calculation Loss Reserve = ‘83’
| Business Ledgers | ||||||
|---|---|---|---|---|---|---|
| OCC ‘as booking’ | RP1 | RP2 | RP3 | RP4 | ||
| Ins. Per. | Entry Code | Amount | 02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
02: 25% 03: 25% |
| 2002 | 36 | 80.000 | ||||
| 2002 | 81 | 10.000 | 10.000 | 10.000 | 10.000 | |
| 2003 | 35 | -60.000 | *)2.500 | *)2.500 | *)2.500 | *)2.500 |
*) Calculated as ((80.000 x 25%x 50%) -(-60.000 x 25% x50%) x -1) = 2.500
Manage Premium Portfolio based on Deposit #
The Premium Portfolio method_Manage Portfolio based on Deposit_ is a calculation based on certain Premium Portfolio/Premium Deposit conditions being defined. Total Premium Deposit retained during the Accounting Year is released when running the last Account of the Insured Period and retained when running the first Account of the next Insured Period. A Premium Portfolio Withdrawal is booked together with the Deposit balance released and a Portfolio Entry is booked with the Deposit balance retained on the next Insured Period (refer to below for further information of the Premium Portfolio calculation).
This Premium Portfolio option is based on the Manage Portfolio based on Deposit check box on the Premium Portfolio Condition (PF) being selected. The functionality applies only when Premium Accounting Basis is Clean Cut and when the Premium Deposit Release in = Next Acct. Year with Transfer to next Ins Per. (Refer to chapter 06 Handle Conditions for more information of how to define the Premium Portfolio/Premium Deposit conditions). Available calculation method when Manage Portfolio based on Deposit is Percent of Premium. If selected, the calculation is according to the following;
Premium Portfolio Withdrawal- is calculated when running the last Account of the Insured Period. The premium booked on the OCC ‘as Booking’ business ledger for the Insured Period to be closed, is multiplied with the ORP share for the same Insured Period. The result is multiplied with the Portfolio Withdrawal percentage;
- Premium OCC ‘as Booking’ IP1 x ORP share % IP1 x Portfolio Withdrawal % IP 1
The ORP Premium Portfolio Withdrawal amount is assigned the 1stAccounting Period in the next Accounting Year, but with the Insured Period to be closed (i.e. Insured Period 1).
Premium Portfolio Entry- is calculated when the OCC/ORP is renewed to the next Insured Period (referred to below as Insured Period 2) and is calculated when running the 1stAccount for the Accounting Year 2, Insured Period 2. The basis for the calculation is the OCC ‘as Booking’ premium amount adjusted by the ORP share Insured Period 2 and multiplied with the Premium Portfolio Entry percentage from Insured Period 2.
- Premium OCC ‘as Booking’ IP1 x ORP share % IP2 x Portfolio Withdrawal % IP 2
The ORP Premium Portfolio Entry amount is assigned the 1stAccounting Period in the Accounting Year 2 and the Insured Period 2.
Example
Accounts = quarterly
Manage Portfolio based on Deposit = selected
Premium Accounting Basis = Clean Cut
ORP share IP 1 = 100%
ORP share IP 2 =75%
Premium Deposit = 33.33% of Premium
Premium Portfolio = 33.33% of Premium
Premium 100% = -1.000 in each quarter 1st to 4th quarters year 1
Premium 100% = -2.000 in each quarter 1st to 4th quarters year 2
ORP 1
| Year | Quarter | Premium | Prem Dep Retained | Prem Dep balance Released | Prem Dep balance Retained | Prem Portfolio Withdrawal | Prem Portfolio Entry |
|---|---|---|---|---|---|---|---|
| Year 1 | 1st | -1.000 | 333,33 | ||||
| 2nd | -1.000 | 333,33 | |||||
| 3rd | -1.000 | 333,33 | |||||
| 4th | -1.000 | 333,33 | |||||
| 1st | -1.333,32 | (*) 1.333,32 | |||||
| Year 2 | 1st | -1.500 | 500 | -250 | 1.000 | ( **) -1.000 | |
| 2nd | -1.500 | 500 | -250 | ||||
| 3rd | -1.500 | 500 | -250 | ||||
| 4th | -1.500 | 500 | -250 | ||||
| 1st | -2.000 | 2.000 |
(*) The Accounting Year assigned to the Portfolio Withdrawal detail is Accounting Year 2, but Insured Period 1. Booked when running the Retrocession Calculation Order for the 4th quarter Account, Insured Period 1.
( **) The Accounting Year assigned to the Portfolio Entry detail is Accounting Year 2, Insured Period 2. Booked when running the Retrocession Calculation Order for the 1st quarter Account, Insured Period 2.This amount is adjusted with the ORP share for the Insured Period 2 (75%)