REINSURANCE: An actuarial estimate of amounts required to pay ultimate net losses that refers to losses that have occurred but have not yet been fully and finally settled/paid . IBNR has two components: (1) a provision for loss and loss adjustment expense (“LAE”) reserves in excess of the current reserves on individual claims that have been reported during the accounting period but which have not yet been paid in full, reflecting the potential increase in the value of these claim values when they are ultimately paid (IBNER – see below); (2) a provision for loss and LAE reserves on claims that have occurred but have not yet been reported during the accounting period (IBNYR – see below).
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UK: At the end of an accounting period, the insurer creates a reserve to cover the estimated cost of losses that have occurred but have not yet been reported. The ‘INBR’ reserve is quite significant in liability insurance as many claims have a ‘long tail’. The regulatory authority prescribes the form in which INBR claims must be included in the FSA returns.
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MEDICAL,USA: Cash reserve established by an insurance company or managed care plan to pay for medical services that have been provided to members but for which claims have not yet been received by the payer. These cash reserves are created by using an estimate based on prior insurance claims submissions. Also called unreported claims .
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MEDICAL,USA: Dollar amount the insured payer’s plan builds up to anticipate unknown medical expenses.
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REINSURANCE: The liability for future payments on losses which have already occurred but have not yet been reported in the reinsurer’s records. This definitely may be extended to include expected future development on claims already reported. Thus, technically IBNR covers the field from (a) those individual losses that have occurred but have not been reported to the insurer or reinsurer to (b) that amount of loss that may arise from a known loss which has been reported as an event but which has not been recorded in full to its ultimate loss value (known as loss development).
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An estimate of the liability for claim-generating events that have taken place but have not yet been reported to the insurer or self-insurer. The sum of IBNR losses plus incurred losses provides an estimate of the total eventual liabilities for losses during a given period.
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Estimated losses which an insurer or reinsurer, based on its knowledge or experience of underwriting similar contracts, believes have arisen or will arise under one or more contracts of insurance or reinsurance, but which have not been notified to an insurer or reinsurer at the time of their estimation.