Dr. Cash Cr. Life
The journal entry a reinsurer would record when there's a hurricane and they expect an ultimate loss of $1M.
What is Dr. Change in IBNR $1M, Cr. IBNR $1M
When a claim is reported, a (re)insurance company will set up this kind of reserve.
What is an OSLR or case reserve
A request that is made to an insurance / reinsurance company for payment as compensation for a loss suffered under an insurance policy.
What is a claim?
A policy that covers events occurring during the coverage period, regardless of when the claim is reported.
What is a losses occurring policy?
Insurance companies typically use this type of year to measure their financial performance.
What is a calendar year?
The journal entries a reinsurer would record when a $500 claim is reported.
What is Dr. IBNR $500, Cr. Change in IBNR $500 & Dr. Change in OSLR $500, Cr. OSLR $500
This kind of reserve might be recorded when there is outwards reinsurance coverage.
What is a reinsurance recoverable?
OSLR, or an outstanding loss reserve can often be called by this other name
What is a Case Reserve?
A basis under which reinsurance is provided for claims based on when the underlying policies are issued (renewed, new or in-force) ie. during the period covered under the reinsurance agreement.
What is a risk-attaching policy?
The year in which the loss event happens.
What is an accident year?
The journal entries a reinsurer would record when $1,000 in claims are paid.
What is Dr. OSLR $1,000, Cr. Change in OSLR $1,000 & Dr. claims expense - paid losses $1,000, Cr. Cash $1,000
The journal entry a reinsurer would record if the actuaries estimate of the ultimate loss increased by $50M.
What is Dr. change in IBNR $50M & Cr. IBNR?
A term describes the total of IBNR, OSLR and Paid Losses
What is an ultimate loss?
A policy that covers claims reported during the term of the policy where the loss event took place on or after the retroactive date.
What is a claims made policy?
The year in which a policy incepts
What is the underwriting year?
The journal entry a reinsurer would record if the actuaries reduced their estimate of the ultimate loss by $25M
What is Dr. IBNR $25M and Cr. Change in IBNR $25M
These losses are the total of paid losses and case reserves.
What are incurred/reported losses?
The dates between which a reinsurer will be responsible for a claim arising from policies or risks ceded during the period of effect of the treaty.
What is the period of coverage?
The date of inception through to the date of termination
What is the period of effect?
Workers compensation and professional liability insurance are examples of this type of business
What is long tailed business?