Insurance
Funds Held by Reinsurer
Recording the deposit withheld from the reinsurer as security.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Funds Held by Reinsurer (Asset) | Asset (+) | 50,000.00 | - |
| Reinsurance Payable (Reduced) | Liability (-) | - | 50,000.00 |
💡 Accountant's Note
Some cedants withhold a deposit (funds held) from the reinsurer as security against their claims obligations. The cedant pays interest on this amount. It reduces the reinsurance payable but is still owed to the reinsurer.
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