Process of estimating or calculating amounts to be allocated to cover outstanding claims and unexpired risks. Insurers use an actuarial approach or a computerised program for the purpose. The reserved amount is adjusted whenever new information on a claim is received.
Tag: RAW
Reserving assumptions
The amount of money that has been set aside by an insurer or reinsurer to meet outstanding claims, incurred but not reported losses, and any associated expenses. Assumptions that typically actuaries or claims handlers make to estimate how much money will be needed.
Reserving Versus Provisioning
The following are the main differences between reserve and provision: (i) Mode of Creation: Reserve is created against the charge of the profit and loss appropriation account. Provision is created against the change of the profit and loss account. (ii) Objective: Main objective of reserve is to strengthen the financial position and to meet future unknown losses and liabilities. Objective of provision is to meet known losses and liabilities the amount of which is not certain. (iii) Relation with Profit: Reserve is created when there is enough profit in the business. Provision is created even if there is loss in the business. (v) Distribution: Reserve can be distributed to shareholders as dividend. Provision cannot be distributed as dividend to shareholders.(vi) Future Requirement: Provision is created by estimating the future requirements of the business. (vii) Impact: Impact of reserve will be on financial position. Impact of provision will be on profit or loss of the business.
Reset mechanisms
Applies to some ART products enabling them to be varied following the occurrence of loss(es). It also refers to risk modelling techniques whereby the premium payable under a multi-year contract is automatically adjusted by reference to the claims record and changes in the prevailing market and economic conditions.
Residence employee (Workers Compensation)
A person employed to perform household services.
Residence Employees
An employee whose duties are incidental to the ownership, maintenance or use of personal residential premises and to the personal rather than business activities of the insured.
Residence premises
In homeowners insurance, the dwelling, other structures and grounds, or that part of any other building where the named insured lives.
Residence premises (Liability Insurance)
The building in which the homeowners insurance policyholder lives.
Resident
For Medicare, a physician who is participating in an approved graduate medical education (GME) training program or one who is not in an approved program but who is authorized to practice only in a hospital setting. This includes interns and fellows where direct GME payments are made by the fiscal intermediary.
Resident agent
A licensed agent who resides in and is licensed in the state in which business is being written.
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US: An agent domiciled in the state in which he or she conducts his or her business activities.
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An agent who lives in the same state in which he or she conducts business.