054.00.22-4. Claim Reserves
AR ADC 054.00.22-4Arkansas Administrative Code
Ark. Admin. Code 054.00.22-4
054.00.22-4. Claim Reserves
(ii) For group disability income claims with a duration from date of disablement of more than two (2) years but less than five (5) years, reserves may, with the approval of the Commissioner, be based on the insurer's experience for which the insurer maintains underwriting and claim administration control. The request for such approval of a plan of modification to the reserve basis must include:
NOTE: For experience to be considered credible for purposes of Item (ii), the company should be able to provide claim termination patterns over no more than six (6) years reflecting at least five thousand (5,000) claims terminations during the third through fifth claims durations on reasonably similar applicable policy forms.
For claim reserves to reflect “sound values” and reasonable margins, reserve tables based on credible experience should be adjusted regularly to maintain reasonable margins. Demonstrations may be required by the Commissioner of the state of domicile based on published literature (e.g. Goldman, TSA XLII).
A generally accepted actuarial reserving method or other reasonable method, if, after a public hearing, the method is approved by the Commissioner prior to the statement date, or a combination of methods may be used to estimate all claim liabilities. The methods used for estimating liabilities generally may be aggregate methods, or various reserve items may be separately valued. Approximations based on groupings and averages may also be employed. Adequacy of the claim reserves, however, shall be determined in the aggregate.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 054.00.22-4, AR ADC 054.00.22-4
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