Re: Revised ALAE/ULAE definition

( GregGrace@aol.com )
Wed, 29 Jul 1998 06:54:03 EDT

I agree that that approach may work for a "company" actuary. However, I am
working as an outsider and, while I have suggested that my companies track the
types of things you suggest, I cannot expect that they will be able to provide
anything beyond what appears in published financial statements. If I were
able, I'd keep track of the reassignments so that I could continue to do the
analysis based on the old definition until sufficient data were available to
do it the new way.

I'm also interested to see if this impacts any IRIS ratios, since costs
reserved as ALAE as of 12/31/97 can now be booked as paid ULAE in 1998 and
subsequent (since the change can be made on a calendar year basis). Since
ALAE is part of the IRIS development tests but ULAE isn't, this will appear as
a reserve redundancy.

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