SSAP 53 Flashcards

1
Q

When is Written Premium recorded for most contracts; and what is the exception to this rule.

A
  • effective date

* exception of WC, which can be recorded on an installment basis

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2
Q

When are the additional premium for endorsements and changes in coverage recorded?

A

Effective date of change

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3
Q

2 methods to uniformly earn premium throughout the year:

A
  1. daily pro rata: compares the number of days which have elapsed to the number remaining.
  2. monthly pro rata: assumes that the same amount of business is written on any day of the month, and therefore the mean will be written in the middle of the month
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4
Q

Accounting treatment of flat fees:

A

Included in “other income”

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5
Q

How is EBUB recorded, both before and after the exposure is audited:

A
  • Prior to the audit, companies should estimate EBUB. Premium is modified by the level of this estimate.
  • Once the audit is completed, EBUB shall be adjusted to reflect the actual exposures. This adjustment is recognized as revenue immediately.
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6
Q

Rule to determine non admitted EBUB:

A

10% of the EBUB in excess of the collateral held is nonadmitted. If any EBUB over this level is not anticipated to be collected, it should also be written off.

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7
Q

Accounting treatment of advance premiums:

A
  • recorded as liability

* not considered income until due

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8
Q

Necessary disclosure if the premium written through MGAs or TPAs exceed 5% of surplus:

A
  • name & address
  • federal employer identification number
  • whether the party holds an exclusive contract
  • type of business written
  • type of authority granted
  • total premium written
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