What is the correct order for determining the due date of reinsurance recoverables?

• A. Terms of the reinsurance contract specify when reinsurer pays
• B. Terms specify when the insurer reports the claim
• C. The date at which the amount recoverable from a certain reinsurer exceeds $50K, and is entered into the insurer's account as paid recoverables
• D. The date the claim is filed

Answer: (A)

The timing of reinsurance recoverables is defined by the payment terms in the reinsurance contract. The contract specifies exactly when the reinsurer is obligated to pay—often after the loss is incurred and the insurer has paid or settled the claim, or after proof of loss is provided, within a stated payment window. Because these contractual terms set the actual payment trigger, they determine the due date for recoverables.

Dates like when the claim is filed or when the recoverable amount crosses a threshold are not what establishes when the reinsurer must pay. Those are administrative or accounting milestones, not the contractual payment trigger. Hence, the best approach is to reference the contract terms first to determine the due date.