Report of Committee on Compensation and Liability Loss and Loss Expense Reserves [Discussion]

The Committee's report focuses attention at a particularly opportune moment on what is perhaps the most troublesome problem facing casualty companies today in the preparation of their annual statements, that is, the question of establishing for Compensation and Liability lines loss and loss expense reserves that will be adequate but not excessive, with the added objective of segregating these two types of liabilities so that their corresponding items of losses and loss expenses incurred will be properly reflected in the Underwriting Exhibit. The subject is equally important to the companies from the standpoint of their internal exhibits, including data on branch and agency loss ratios, profit sharing statements, classification and other rating filings, and other procedures involving the use of case estimates on open claims.