On LDCE worksheet A (Worksheet for reporting individual loss data),
how should non-insurance recoveries be treated? Should the total loss
reported in column 10 be gross or net of non-insurance recoveries?
The total loss reported in column 10 should be reported net of non-insurance
recoveries (but gross of insurance recoveries). That is, if a loss occurred and
a non-insurance recovery related to that loss was subsequently made, then the total
loss reported in column 10 should equal the initial loss amount minus the amount of
the non-insurance recovery. Note also that certain timing issues may apply to the
netting of recoveries against the original loss amount. That is, recoveries that are
made very much after the date of the original loss may be treated differently than
recoveries made immediately following the loss. (For example, an institution may
decide that a recovery made in a different year than the original loss will not be
netted against that loss.) Although there is no specific LDCE instruction regarding
this recovery timing issue, treatment of this issue for the LDCE should be consistent
with the treatment for QIS.
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