The Schedule F Penalty: Effective or Evaded?

The revisions to Schedule F that could result in a penalty against surplus caused by authorized reinsurers have been in effect since the 1989 Annual Statement. This paper compiles statistics associated with these new penalties as well as the long-standing penalties due to unauthorized reinsurers and analyzes them. The impact the penalties have on companies and in total is measured. Several areas of interest are discussed and suggestions are made for improvements, revisions or refinements. Other key words: reserving, accounting, financial reporting.