Revenue Initial Recognition and Measurement
Insurance companies do have additional adjustments; however, adjustments other than those attributable to unearned premiums
illustrated above are minimal.
Adjusted book value is defined as book value (shareholders' equity), plus the after-tax value of net unearned premium
reserve less deferred acquisition costs, plus the after-tax present value of future installment premiums.
Previously, it was the IRS's position that such amounts should be included as part of the unearned premium
reserve subject to the 20% reduction.
The couple, though, paid the loan off in July 2007 and said they were legally entitled to a refund of the unearned premium
, which they never received.
Mayer, attorney general, wrote, "The receiver of an insolvent fire insurance company is justified in using the unearned premium
fund for purposes of reinsurance or of restoring to the policyholders upon cancellation of their outstanding policies.
Partially offsetting these positive factors is the company's elevated investment leverage as a percentage of equity, as well as its elevated unearned premium
reserve leverage due to the long duration of vehicle service contracts.
Under the agreement, the unearned premium
reserves on ANV s marine and energy business will be moved to Tower Group and was earlier written from its New York office.
If an insured defaults, the unearned premium
held by the carrier is returned to the premium financing company, as required by law.
As part of the agreement, Ariel has agreed to provide FMFC with full protection related to the run off of Valiant's net loss and loss adjustment expense reserves and unearned premium
reserves on the closing date balance sheet.
The implementation of automated unearned premium
calculation to reinstate the old manual method resulted in extra provision of around BD270,000.
Around this time, New York fire companies also were required for the first time to show the approximate equivalent of an unearned premium
reserve as a liability, namely "the amount required to safely reinsure all outstanding risks.
Although offsetting factors include high unearned premium
leverage, Dealers has made considerable progress in establishing actuarial reporting procedures with respect to the long duration unearned premium
reserves held at the administrator obligors with whom it does business.
The underwriting losses in 2008 were primarily reflective of an unearned premium
reserve increase, and to a lesser extent, from a decrease in premium volume from the economic decline in automobile sales nationwide.
The collateralization should be for an amount equal to the captive insurance company's ultimate expected losses plus unearned premium