Since it appears no actuary in a regulatory role has responded to your =
question regarding ULAE, I will. I work in the financial program at the =
During a financial examination, the goal is to find the most accurate =
estimate of any reserve on the balance sheet, with the caveat that in the =
face of uncertainty, appropriately conservative judgement is used. =
Clearly, statutory accounting does not require a particular estimation =
method for ULAE reserves. Use the most effective methods to estimate =
reserves, whatever they may be. If the company changes the methods it =
uses to estimate the reserve, and these changes produce a material change =
in the reserve estimate, disclose this.
1. Consider the materiality of the reserve when judging how accurate the =
reserve estimate should be: the larger the amount, the higher the =
2. Speak with the regulator of your company when you have specific =
concerns about accounting issues.
Regulators, along with nearly everyone else, recognize the statutory =
statement as living, breathing, imperfect document designed by an =
ever-changing committee. May it improve continuously as long as it does =
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