NAIC Annual Statement: Schedule P

Question 1

What is Part 1?

Answer 1

Schedule P, Part 1 summarizes the insurer’s net loss and loss adjustment expense (LAE) reserves as of 12/31. The section also show tabular and non-tabular discount.

Question 2

What is Part 2?

Answer 2

Schedule P, Part 2 shows the 10-year history of incurred loss and defense cost and containment expenses (DCC).

Question 3

What is Part 3?

Answer 3

Schedule P, Part 3 shows the 10-year history of paid loss and defense cost and containment expenses (DCC).

Question 4

What is Part 4?

Answer 4

Schedule P, Part 4 shows the 10-year history of bulk + IBNR loss and defense cost and containment expenses (DCC).

Question 5

What is Part 5?

Answer 5

Schedule P, Part 5 shows the 10-year history of various claim counts:

• Section 1: Cumulative Claims with Loss Payment
• Section 2: Claims Outstanding
• Section 3: Cumulative Reported Claims

Question 6

What is Part 6?

Answer 6

Schedule P, Part 6 shows the 10-year history of net earned premium by policy year in each respective calendar year (this differs from the cumulative data elsewhere in Schedule P).

Question 7

What is Part 7?

Answer 7

Schedule P, Part 7 details the premium and loss information on loss sensitive contracts for direct and reinsurance business separately. Part 7 is only required if the insurer use the RBC loss sensitive discount.

Question 8

What are the Schedule P, Interrogatories are relevant to actuaries?

Answer 8

• Interrogatory 1: Disclosure of whether or not the insurer has exposure to extended reporting endorsements [on claims-made policies] in the event of death, disability, or retirements (commonly referred to as DDRs).
• Interrogatory 2: Disclosure that the annual statement has coded LAE as defense cost and containment (DCC) and adjusting and other (AO) expense [as opposed to ALAE and ULAE].
• Interrogatory 4: Disclosure of whether or the not insurer uses tabular or non-tabular discounting along with the underlying assumptions.
• Interrogatory 6: Disclosure of whether or not counts in Part 5 are defined as per-claim or per-claimant.
• Interrogatory 7: Disclosure of any significant or material changes which the user should be aware of if using Schedule P to assess the adequacy of the reserves.