min(Claim Liabilities, Reported Reserves) = Claim Liabilities

chrisboersmachrisboersma
in CIA.Taxes

When would you end up with Claim Liabilities > Reported Reserves?

This would be at worst illegal (in some jurisdictions) and at best would result in a unfavorable statement from the Appointed Actuary.

So... why not write min(Claim Liabilities, Reported Reserves) = Claim Liabilities?

Or is this provision (min) left for non-material differences between Claim Liabilities & Reported Reserves?

Comments

  • grahamgraham

    My thought here is that the AA may calculate a range of reasonable estimates for claim liabilities in addition to a point estimate. The reported reserve might be less than the point estimate, but still within the AA's acceptable range.

  • chrisboersmachrisboersma

    Thanks, very helpful

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