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Surplus Lines > Financials - Yellow Book > Flashcards

Financials - Yellow Book Flashcards

1
Q

What is the “Direct” Page?

A

1st pge/ contains attestations/ state of domicile

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2
Q

Quarterly & Annual Statemetns are filed with whom (3)?

A

DOI / NAIC / AM Best’s

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3
Q

What is the intent of WA laws & regulations?

A

Protect buyer

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4
Q

What is the primary exemption for SL insurers?

A

Rate filings (not security/financial requirements)

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5
Q

Why was statutory accounting developed?

A

Uniformity & consistency of reporting

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6
Q

Who developed statutory accounting?

A

NAIC

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7
Q

What does liquidity (solvency) indicate?

A

Ability to pay claims

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8
Q

Yellow book balance sheet

A

Pages 2 & 3/ Assets = Liabilities + Surplus

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9
Q

What is Schedule D?

A

Bonds

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10
Q

What does “investments should parallel liabilities” mean?

A

Long tail business should have investments that have long maturity/ Short tail business can have investmetns that maure sooner

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11
Q

SVO means

A

Securities Valuation Office

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12
Q

Factors to consider in reviewing stock investments (2)

A
  1. SVO value (lowest best)

2. Affiliated & interrelated stock - better security when stocks not related or affiliated

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13
Q

What are non admitted assets?

A

Assets not available to pay claims therefore not counted toward surplus/ Examples: AR (incl agents & reins due) over 90 days & fixtures over 30 days

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14
Q

What are Net Admitted Assets?

A

Total Assests (Page 2) MINUS Non Admitted Assets. Assets available to pay claims (form a statutory perspective)

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15
Q

What is Schedule F?

A

Reinsurance

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16
Q

What is Schedule F Part 1?

A

Assumed Reinsurance (liabilities)

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17
Q

What is Schedule F Part 3?

A

Ceded Reinsurance (Reinsurance Recoverables)

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18
Q

Assets 16.1 “Reinsurance” amounts recoverable consists of?

A

Paid Losses & Paid LAE from Schedule F Part 3 - Reserves & IBNR not included

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19
Q

What Schedules OMITT 000 (and need to be added back for calculations?

A

Schedule F (reinsurance), Schedule P (losses & loss expense)

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20
Q

Where are ceded premiums found?

A

Balance Sheet Liabilites (Page 3) - Not Income

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21
Q

Where are Agents balances due found?

A

Assets (Line 15) - Amount (written premium) due from agent

22
Q

What is Retaliatory Tax?

A

Pay the same tax rate as domiciled state tax rate in other states even if other state’s tax rate is lower

23
Q

How is accounting handles on a 2 year policy?

A

Recognition of 2nd year of premium is deferred - allocated to unearned premium reserve

24
Q

How does reinsurance surplus relief improve financials?

A

Ceding commission is considered direct earned.

25
Q

Simple definition of Surplus (formula)

A

Assets MINUS Liabilities

26
Q

Expense Ratio formula

A

“other UW Expenses” (Income Statement) divided by earned premium

27
Q

Loss Ratio formula

A

Loss + Loss Expense (Income Statement) divided by earned premium

28
Q

Combined Ratio

A

Expense Ratio + Loss Ratio

29
Q

Statement of Income is on what page?

A

Page 4

30
Q

Statement of Income shows what?

A

Change

31
Q

Premium shown on Statement of Income is what type?

A

Earned

32
Q

What types of premium are shown on Assets?

A

Only Agents Balances Due & Deferred (no written/ earned or unearned)

33
Q

Where is net written premium found?

A

UW Exhibit - Part 1 /Part 1B Also Sched T by state

34
Q

Net Premium in yellow book means?

A

Net of reinsurance.

35
Q

UW Exhibit Part 1 shows

A

Net Written Premium (Col. 1) & Premium Earned (Col. 4)

36
Q

UW Exhibit Part 1A shows

A

Unearned premium reserve

37
Q

What is Schedule T?

A

Written Premium by State

38
Q

What is Schedule Y?

A

Organizational Chart

39
Q

What is Schedule E - Part 3?

A

Special Deposits (benefit of policyholders) by state

40
Q

MDA means

A

Management Discussion & Analysis

41
Q

What is MDA (Management Discussion & Anaylsis)?

A

Managment assessment & summary of financials

42
Q

UW Exhibit Part 1B (Page 8***) shows

A

Gross Written Premium = Direct + Reinsurance Assumed & Ceded / ALSO/ Net Premium Written (same as Part 1)

43
Q

“As Of” dates for regulatory exams are dound where?

A

Interrogatories

44
Q

Where is regulating state listed?

A

Interrogatories

45
Q

Footnotes (Notes to Financial Statement) - Significant Info (3)

A
  1. Info on parents/subsidiaries/affiliates #10
  2. Leases (Long Term Commitments) #15
  3. Fair Value Measurements (SVO, etc.)
46
Q

Where is “Capital” (stock) found?

A

Page 3 Liabilites & Surplus (line 30 & 31) AND 5 Year Historical

47
Q

Where is IBNR found?

A

UW Exhibit Part 2A (PAGE 10) & Schedule P

48
Q

What is Schedule Y?

A

Info on Holding Company

49
Q

What does 5 Year Exhibit provide?

A

Capital, Surplus & Changes

50
Q

Schedule P Part 2 shows

A

Reserve Development

51
Q

UW Exhibit Part 2 shows

A

Losses Paid & Incurred

Surplus Lines (5 decks)

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