Actuarial Note on Workmen's Compensation Loss Reserves

In the calculation of tabular reserves for long term pension type awards special care must be used when an excess of loss reinsurance coverage is involved. In this situation some or all of the parties interested in the transaction - ceding company, reinsurer, and regulator--frequently do not understand, or sometimes are not even aware of, the proper way to calculate the ceded reserve and, of course, this usually means that the net reserve is also incorrect.