Contra Liabilities

[Wolfy]

When they say that reinsurance recoverable on unpaid loss and LAE is a "contra liability" to gross unpaid loss and LAE, is this just another way of saying that:

"ceded reinsurance on unpaid loss and LAE is subtracted from Direct + Assumed unpaid loss and LAE on Part 2A of the underwriting and investment exhibit"?

thanks in advance.

[CaffeineJunky]

I believe that a "contra-liability" is a seperate negative entry on the liability side of the balance sheet. It essentially has the same effect as a positive asset.

[Wolfy]

Thanks.

So if you look at an actual annual statement you never really see the contra liabilities or where they offset the liabilities?

I am looking at CNA annual statement 12-31-07 and I cant find any entries for "contra-liabilities". It doesn't look like they are offset from the unpaid loss and LAE on Part 2A since the liabilities on Page 3, Lines 1 and 3 exactly match the ending values on Part 2A of the U/W and investment exhibit.

Sorry if this is a stupid question but it just doesn't make sense to me yet

[CaffeineJunky]

I thought that there was a seperate entry, but looking at my company balance sheet I don't see one. It appears as if the losses are on a net basis in the balance sheet, as you mentioned, the ceded losses are subtracted in the UW and Inv Exhibit part 2A. Good catch.