2015 Q14
The model solution for Part B. says that the shortcoming of Schedule P is that part 2d does not include AAO expenses.
What are AAO expenses?
Thanks.
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The model solution for Part B. says that the shortcoming of Schedule P is that part 2d does not include AAO expenses.
What are AAO expenses?
Thanks.
Comments
AAO: adjustment and other. In 1997, NAIC redefined loss adjustment expenses into the categories of DCC (defense cost containment) and AAO. These loosely correspond to ALAE and ULAE, respectively, but with some subcategories changing places. AAO is generally the kind of expense that can't be associated with any one given claim.
Thanks. I knew it was "the other part to DCC" but I didn't know what it stood for.
Sure, good luck.