Fall 2015 Q14
For the claim closure rates in part B, the examiner's report has it given as monthly development. Is this the only accepted way to set up the claim closure rate table or would setting it up in the Schedule P format, showing CYs for the columns, be accepted as well?
Comments
Schedule P Part 5 also has monthly development. Only, its orientation is different. The diagonals in Part 5 correspond to the columns in the sample answer.
Hi for d) one of the solution samples is "Evaluate reserve adequacy (part 2 and part 5)", may I ask the logic behind this one as part 2 shows incurred not unpaid? thank you
Part 2, standing alone, will be useful with its 1-year and 2-year development totals. Part 5, in conjunction with Parts 2, 3 and 4, can give average case outstanding reserves, the trends in which will be indicative of reserve adequacy.
These are discussed in detail on Odomirok page 176 and 191, respectively.