Note: These questions and answers are intended for LDCE purposes only.
Question: 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? (February 9, 2005)
Answer: 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.