coverage units on LRC
Could you further elaborate on this statement "the coverage period extends to the end of the period in which insurance contract services are provided and would not extend to the period over which claims are settled (unless claims in settlement are included in LRC rather than LIC)."
how can you possibly have a settlement for liability that has not yet occurred? and does this mean the coverage period doesn't extend to the end of the contract? when is the end of the coverage period when we do include settlement in LRC?
Comments
I think it's saying for example, let's assume a 1-year coverage period policy incurs a claim in month 11/12. It could still be unsettled (not paid) in month 13, 14, ... (beyond month 12) but the coverage period would end at month 12 and so would the contract boundary. We don't wait for all claims to be paid out to end the contract boundary because that could be years long?
Adipelino is right for the first statement. An example of "unless claims in settlement are included in LRC rather than LIC" is an adverse development cover where the definition of an insured event is the determination of the ultimate loss amount. In this case, claims in settlement will all go to the LRC