Page 142 - NIB Annual Report 12-13 | 13-14

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD
Notes to Financial Statements, continued Year ended March 31, 2014
20. Financial instruments, continued
(a) Credit risk, continued
The movement in the allowance for impairment in respect of contributions receivable during the year is disclosed at note 6 to these financial statements.
The allowance for impairment reflects estimates of losses arising from the failure or inability of NIB’s contributors to make required payments. The allowance is based on the aging of contributor accounts, contributor credit worthiness and NIB’s historical write-off experience. Changes to the provision may be required if the financial condition of its contributors improve or deteriorate. An improvement in financial condition may result in lower actual write-offs. Historically, changes to the estimate of losses have not been material to NIB’s financial position and results of operations.
During the year ended March 31, 2014 NIB changed its basis for estimating the impairment allowance for contributions receivable.
Provision is made against outstanding contributions on the following basis:
Outstanding but not past due Past due:
Not later than one month
Later than one month but not later than two months Later than two months
2014 2013 10% –
20% 10% 40% 20% 90% 40 – 90%
Contributions receivable with pending legal matters that are past due for more than 90 days are 50% provided for (2013 – 50%).
The credit quality of available-for-sale financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (Standard & Poor’s Ratings Services and Moody's Investor Services, Inc.) or to historical information about counterparty default rates:
UBS Financial Services Inc.
UBS Financial Services Inc. Merrill Lynch, Pierce
Fenner & Smith Incorporated Morgan Stanley Smith Barney LLC Wells Fargo Advisors, LLC
Credit Rating A; A2
Credit Rating A; A2
A-; Baa1 A-; A2 A+; A2
US$
US$
US$
2014 147,024,963
2013
84,649,552
27,112,168 13,012,321 9,096,819 133,870,860
138| The National Insurance Board of The Turks and Caicos Islands
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