On Indeterminate Claims Reserve Tables for Compensation

In workmen's compensation insurance there arises the problem of setting up reserves for future compensation payments in individual cases of disability before it is known whether the disabled workers will recover, suffer permanent partial or total disability, or die from the injuries. These reserves should reflect the ultimate cost of indemnity as correctly as possible for several reasons: it is requisite to the sound financial and underwriting management of the carriers that they do so; when reported as incurred losses to the rate making organizations they affect the manual rates, and, similarly, when reported under the experience rating plans they affect the departures from manual rates assigned to qualifying risks.