Method for Setting Up Reserve to Cover Incurred but not Reported Loss Liability

This paper is not intended as a scientific treatise of an obscure subject, but is submitted to introduce for discussion the practical side of an acknowledged liability which is of considerable consequence to insurance companies, and should be given the proper consideration. No company will deny a hidden liability in unreported claims, but there is quite a bit of dissension as to how it should be treated. This question has been considered from every angle by the Fidelity and Surety Committee of the association of Casualty and Surety Accountants and Statisticians, and the report of that Committee is taken as the base of these remarks. That Committee particularly, and the Association generally are responsible for any consideration that may be given this subject, with the added responsibility that the writer may have included matters that do not meet with their entire approval. However, a complete discussion of the many points involved cannot help but do something toward clearing the atmosphere.