Odomirok 15

Question 1

Schedule P

Answer 1

Most important schedule to actuaries; provides detail about the loss and LAE reserves

Question 2

Uses for Schedule P

Answer 2

• Ann. Stmt is public doc, so outside parties can assess reserve adequacy
• Support and provide disclosure for the SAO
  + direct plus assumed and net loss and expense reserves
  + anticipated S&S that the reporting entity is taking credit for in its reserves
  + tabular and non tabular discounts that the reporting entity is taking credit for in reserves
• Show how reserves have developed over time, and indicates where the development is coming from (e.g. a specific year or line of business)
• Provide the source of payment patterns to be used in the tax discounting calculations
• Show the split between case reserves and IBNR
• Provide historical claim count data to help review trends in frequency and severity, and changes in claims handling and reserving
• Provide the data to calculate the RBC loss sensitive discount

Question 3

Organizational Structure of Schedule P

Answer 3

• Part 1: loss and LAE and earned premium as of 12/31 of the current year
• Part 2: historical net incurred loss and DCC estimates
• Part 3: historical net paid loss and DCC
• Part 4: historical net IBNR for loss and DCC (before tabular discount)
• Part 5: historical claim counts (closed with payment, open and reported)
• Part 6: historical earned premium
• Part 7: loss and premium data on loss sensitive contracts
  Dollar amounts in the Schedule are in 000s

Question 4

Schedule P, Part 1

Answer 4

Contains:

• Summary of all lines of business combined
• Separate schedules by line