Exam 5 Reserving: Claims Professionals

Question 1

Example of different types of claim transactions

Answer 1

1. Establishment of the initial case outstanding estimate 2. Notification to the reinsurer if the claim is expected to exceed the insurer’s retention 3. A partial claim payment to injured party 4. Expense payment for independent adjuster 5. Change in case outstanding estimate 6. Claim payment (assumed to be final payment)

Question 2

Example of different types of claim transactions (Cont’d)

Answer 2

7. Takedown of case outstanding and closure of claim 8. Reopening of theclaim and establishment of new case outstanding estimate 9. Partial payment for defense litigation 10. Final claim payment 11. Final payment for defense litigation 12. Closure of claim

Question 3

case O/S

Answer 3

case outstanding

Question 4

policy effective date

Answer 4

date the insurer issues the insurance policy

Question 5

Accident date

Answer 5

date the covered injury occurs

Question 6

report date

Answer 6

the date the insurer receives notice of the claim

Question 7

transaction date

Answer 7

the date on which either a case outstanding transaction takes place or a payment is made

Question 8

Transaction date

Answer 8

date on which either case outstanding transaction place or a payment is made

Question 9

Closing dates

Answer 9

dates on which the claim is initially closed and final,y closed

Question 10

Reopening date

Answer 10

the date the insurer reopens the claim

Question 11

case outstanding

Answer 11

estimated amount of future payments on a specific claim at any given point in time

Question 12

reported claims

Answer 12

aka. case incurred, sum of cumulative claim payments through a specific date and the case outstanding and the case outsanding at the same point in time

Question 13

LAE

Answer 13

loss adjustment expense

Question 14

reported claim over a period

Answer 14

reported claim at end of period - reported claims at beginning of period or paid claims during period + case outstanding at end of period - case oustanding at beginning of period