NAIC.SSAP-55
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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
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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.
BattleTable
- 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
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In Plain English!
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
- A&O (Adjusting & Other): expenses other than DCC
- Examples:
- - adjuster fees
- - attorney fees
There was a question on this topic from an old SOA exam. See this forum discussion.
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