Changes To Schedule F Expected To Improve Reinsurance Reporting

Jun 22, 2018

By Claude Mueller, CPCU, ARe

Financial reporting for reinsurance on Schedule F will look quite different beginning with the 2018 Annual Statement.  The National Association of Insurance Commissioners (NAIC) Blanks Working Group adopted changes on April 8, 2017 that consolidate several parts of the previous version of Schedule F.  Specifically, Schedule F, Parts 3 through 8 will now be combined into a single Schedule F, Part 3, made up of 78 columns to calculate the Total Provision for Reinsurance (Schedule F Penalty) to be booked as a liability on the balance sheet. 

The NAIC’s changes to Schedule F are intended to eliminate duplication, promote consistency of the reported ceded reinsurance transactions, provide greater automation, and reduce filing errors.  The proposal (2016-35BWG) was submitted to the Blanks Working Group by the Reinsurance (E) Task Force and Property and Casualty Risk-Based Capital Working Group.  The changes also implement the new Reinsurance Credit Risk Risk-Based Capital charge methodology adopted by the Capital Adequacy (E) Task Force.

Columns 1 through 20 of the new Schedule F, Part 3 are the same as the prior Schedule F, Part 3 with an additional column to report, by reinsurer, the amount of any reinsurance recoverables that are in dispute.  Detail regarding collateral and ceded reinsurance credit risk is reported and calculated in columns 21 through 36.  Aging of ceded reinsurance, which was previously reported on Schedule F, Part 4, will now be reported and analyzed in columns 37 through 53 of the new Schedule F, Part 3.  Formerly reported on Schedule F, Part 6, the provision for reinsurance for Certified Reinsurers is calculated in columns 54 through 69. Finally, columns 70 through 78 calculate the total provision for reinsurance, including provisions for unauthorized and authorized reinsurance.

A new Schedule F, Part 4 has been added to provide detail regarding issuing or confirming banks for letters of credit from Schedule F, Part 3.  This information was previously shown as a footnote to Schedule F, Parts 5 and 6.

Interrogatories for Schedule F, Part 3 will be included in a new Schedule F, Part 5.  These interrogatories will include (i) a listing of the five largest provisional commission rates, excluding mandatory pools and joint underwriting associations, in the ceding insurer’s treaties and (ii) the largest reinsurance recoverables reported in Schedule F, Part 3, Column 15, due from any one reinsurer, with disclosure if these are due from an affiliate.  The information on the new Schedule F, Part 5 was previously shown in footnotes to Schedule F, Part 3.

The former Schedule F, Part 9 will be renumbered as Schedule F, Part 6, with no changes to its content.

About the Author
Claude Mueller, CPCU, ARe is an Insurance Regulatory Consultant at Colodny Fass in Tallahassee, Florida.  He can be reached at (850) 570-4763 or