Insurance Industry: Concentration of Credit Risk Disclosures (UGT Version 2013)

Transcription

1 Version 1.0 July 2013 Insurance Industry: Concentration of Credit Risk Disclosures (UGT Version 2013) FASB U.S. GAAP Financial Reporting Taxonomy (UGT) Implementation Guide Series

2 The UGT Implementation Guide is not authoritative; rather, it is a document that communicates how the U.S. GAAP Financial Reporting Taxonomy (UGT) is designed. It also provides other information to help a user of the UGT understand how elements and relationships are structured. Copyright 2013 by Financial Accounting Foundation. All rights reserved. Content copyrighted by Financial Accounting Foundation may not be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the Financial Accounting Foundation. Financial Accounting Foundation claims no copyright in any portion hereof that constitutes a work of the United States Government.

3 UGT Implementation Guide on Modeling Concentration of Credit Risk Overview The purpose of this Implementation Guide is to demonstrate the modeling for disclosures of reinsurancerelated concentrations of credit risk. The modeling has been completed using the elements in the U.S. GAAP Financial Reporting Taxonomy (UGT). Additional extension member elements are created to report certain company-specific disclosures. This guide focuses on detail tagging only (Level 4), it does not include any elements for text blocks, policy text blocks, and table text blocks (Levels 1 through 3). While constituents may find the information in this guide useful, users looking for guidance to conform to SEC XBRL filing requirements should look to the SEC EDGAR Filer Manual and other information provided on the SEC website at xbrl.sec.gov. The Implementation Guide provides three examples listed below: Introductory Example: This section provides an example of a common reinsurance-related concentration of credit risk disclosure. o Example 1 - Introductory Ceded Credit Risk Disclosure Additional Examples: This section provides two additional examples of disclosures of reinsurancerelated concentrations of credit risk. o Example 2 Ceded Credit Risk Disclosure with Two Credit Ratings o Example 3 Ceded Credit Risk Disclosure with Two Tables These examples are not intended to encompass all of the potential modeling configurations or to dictate the appearance and structure of an entity s extension taxonomy. The examples are provided to help users of the UGT understand how the modeling for reinsurance-related concentrations of credit risk is structured within the UGT. Modeling Concentrations of Ceded Credit Risk for Insurance Companies The concentration of credit risk for insurance companies disclosure group in the UGT provides a flexible structure that allows varied reporting practices while providing consistency. Users of the UGT need to use line item elements to represent accounting concepts in conjunction with appropriate member elements under applicable dimensions (axes). The line item elements in the disclosure are the same as those that appear elsewhere in the taxonomy in order to encourage consistent tagging throughout the filing. Appropriate extension member elements need to be created in order to identify company-specific reinsurer information. 1

4 Comprehensive Code List for All Examples We have provided a legend for line items, dimensions, and domain members to associate with facts contained in the financial statements. (1) Coding of line item elements is specific to each example. 2

5 Example 1 Introductory Ceded Credit Risk Disclosure This example illustrates the modeling of the ceded credit risk disclosure. Figure 1.1* *Refer to figure 1.2 for the modeling association between the dimensions and members The UGT elements used to tag these facts are: Figure 1.2 3

6 The instance document created using the ceded credit risk modeling structure is provided below. Figure 1.3 Notes: The line item Reinsurance Recoverables is the same accounting concept as presented in the primary financial statements. Members under the Ceded Credit Risk, Risk Classification [Axis] indicate whether or not a disclosure is a concentration of credit risk. The extension members created under the Ceded Credit Risk, Reinsurer [Axis] identify the different reinsurers with which the entity engages in business. The members under Credit Rating, AM Best [Axis] represent the different credit ratings as defined by A.M. Best. ** Preferred Labels are the labels created and used by the company to show the line item captions in its financial statements. 4

7 Example 2 Ceded Credit Risk Disclosure with Two Credit Ratings This example illustrates the modeling of a more complex ceded credit risk disclosure. Figure 2.1 * *Refer to figure 2.2 for the modeling association between the dimensions and members. The UGT elements used to tag these facts are: Figure 2.2 5

8 Figure 2.3 Note: The value of $62,500 tagged with Prepaid Reinsurance Premiums is also disclosed in the primary financial statements. The value of $418,000 tagged with Reinsurance Recoverables on Paid and Unpaid Losses is also disclosed in the primary financial statements. The value tagged with Reinsurance Recoverables is the sum of Prepaid Reinsurance Premiums and Reinsurance Recoverables on Paid and Unpaid Losses. As in previous example: Members under the Ceded Credit Risk, Risk Classification [Axis] indicate whether or not a disclosure is a concentration of credit risk. The extension members created under the Ceded Credit Risk, Reinsurer [Axis] represent the different reinsurers with whom the entity engages in business. The members under Credit Rating, AM Best [Axis] represent the different credit ratings as defined by A.M. Best. The members under Credit Rating, Standard & Poor s [Axis] represent the different credit ratings as defined by Standard & Poor. The members under the Ceded Credit Risk, Collateralization [Axis] represent whether an amount is collateralized or not. ** Preferred Labels are the labels created and used by the company to show the line item captions in its financial statements. 6

9 Example 3 Ceded Credit Risk Disclosure with Two Tables This example illustrates the modeling of another more complex ceded credit risk disclosure. Figure 3.1* *Refer to figure 3.2 for the modeling association between the dimensions and members. 7

10 The UGT elements used to tag these facts are: Figure 3.2 8

11 Figure 3.3 Note: Amount $302,500 ties to the primary financial statements. This includes reinsurance recoverables on paid and unpaid losses only. As in the previous examples: o o o Members under the Ceded Credit Risk, Risk Classification [Axis] indicate whether or not a disclosure is a concentration of credit risk. The extension members created under the Ceded Credit Risk, Reinsurer [Axis] represent the different reinsurers with whom the entity engages in business. The members under Credit Rating, Standard & Poor s [Axis] represent the different credit ratings as defined by Standard and Poor s. The extension element Ceded Credit Risk, Percentage of Total Reinsurance Recoverables Constituting a Concentration of Credit Risk was created to tag the percentage of reinsurance recoverables to total reinsurance recoverables constituting a credit risk (for example, the denominator in the calculation of the percentage is the amount recoverable from the top 10 reinsurers which is $222,500). The UGT element Reinsurance Recoverables, Percentage of Total was used to tag the percentage of reinsurance recoverables to total reinsurance recoverables (for example, the denominator in the calculation of the percentage is the total reinsurance recoverables which is $302,500). ** Preferred Labels are the labels created and used by the company to show the line item captions in its financial statements. 9