Which of the following is NOT a liability that must be adjusted to zero in Part 8 of Schedule F?

• A. Reinsurance recoverables
• B. Ceded reinsurance premiums payable
• C. Funds held by the company under reinsurance treaties
• D. Provision for reinsurance

Answer: (A)

Part 8 of Schedule F focuses on presenting reinsurance balances on a net basis, so certain reinsurance-related liabilities are reset to zero to avoid double counting. This netting removes spending or obligations tied to reinsurance from the liability side, since their effect is captured through offsets elsewhere in the statement. Ceded reinsurance premiums payable, funds held by the company under reinsurance treaties, and the provision for reinsurance are all liabilities that are zeroed to reflect this net position.

Reinsurance recoverables, however, are amounts the company expects to collect from reinsurers. They are assets, not liabilities, so they are not adjusted to zero. This is why the item that does not belong among the liabilities to be zeroed is reinsurance recoverables.