NAIC.SSAP-55

Reading: Statement of Statutory Accounting Principles 55, “Unpaid Claims, Losses and Loss Adjustment Expenses,” paragraphs 1-6 and 11-19.

Author: National Association of Insurance Commissioners, Accounting Practices and Procedures Manual

BA Quick-Summary: Accounting Principles - Unpaid Loss & LAE This statement establishes statutory accounting principles for recording liabilities for unpaid losses and loss adjustment expenses for property and casualty insurance contracts. It requires insurers to recognize these costs when an insured event happens and to establish liabilities for any unpaid claims. The guidance emphasizes the need for accurate estimates based on past data and current trends, and it requires detailed disclosures in financial statements to keep things transparent.

Study Tips

The year of publication for the manual changes each year but the content generally does not. We will let you know if there is a major change.

Spend 5 minutes max on this reading.

this reading has not been tested on any exam from the year 2012 to Fall 2019 when the exams stopped being published.

reference	part (a)	part (b)	part (c)	part (d)
no prior questions

Full BattleQuiz You must be logged in or this will not work.

Loss Adjustment Expenses (LAE) are classified into 2 categories:

DCC (Defense & Cost Containment): covers defense, litigation, and medical cost containment expenses, whether internal or external
Examples:

- litigation management

- rehab nurses

- adjuster fees

- attorney fees

There was a question on this topic from an old SOA exam. See this forum discussion.

Full BattleQuiz You must be logged in or this will not work.