P&C Concepts Series - Losses

This course defines key terms and concepts related to the accounting for claims for a property and casualty insurance company.

CPE Credits: 2 hours in Accounting

Level: Basic

Prerequisites/Advance Preparation: None

NASBA Publication/Revision Date: May 2020

Learning Objectives

• Identify the accounting impact of the key events in the life cycle of a claim
• Define key terms used in the accounting and reporting of losses
• Distinguish between the different types of loss reserve categories
• Differentiate between methods used to measure and report losses incurred
• Define and distinguish loss adjustment expenses and its subsets

Outline

• Loss Events
  • Incurred Losses
  • Reported Losses
  • Paid Losses
  • Loss Adjustment Process
  • Recoveries
    • Reinsurance
    • Salvage and Subrogation
• Loss Reserve Categories
  • Case Reserves
  • IBNR
  • Bulk Reserves
• Other Loss Reserve Concepts
  • Accrual of Salvage and Subrogation
  • Reserve Discounting
  • Claims-Made Policies
• Measuring Losses Incurred
  • Accident Year
  • Calendar Year
• Loss Adjustment Expenses
  • Defense and Cost Containment (DCC) versus Adjusting and Other (AO)
  • Allocated (ALAE) versus Unallocated (ULAE)