“It’s Not You, It’s Me” (aka Commutation)

The early termination of a reinsurance contract is known as commutation. It releases the reinsurer of its present and future obligations under the original reinsurance agreement for a negotiated consideration as a complete and final settlement. Why commute and how … Continued

Short Duration Contract Enhanced Disclosure Examples

ASU 2015-09 is about enhanced disclosure, and while it lays out certain requirements for presentation and provides examples of what the disclosure might look like, it also leaves a high degree of discretion to insurers to determine how and what information best meets with the spirit and intent of the standard. By now you know ASU 2015-09 requires disclosure of development data for short duration contracts.

Got Risk Transfer?

Reinsurance agreements must contain the element of risk transfer where the reinsurer assumes significant insurance risk and may realize a significant loss from the transaction. However, there is an exception to these rules. In the following example, we demonstrate the “substantially all” exception to the essential elements of risk transfer.

Another One Bites The Dust- Kentucky Health Cooperative

The Franklin Circuit Court has issued an Order authorizing the Commissioner of the Kentucky Department of Insurance (“KDOI”) to liquidate Kentucky Health Cooperative, Inc. (“KYHC” or “co-op”).  KYHC was placed into rehabilitation on October 29, 2015 with oversight of the day-to-day … Continued