Claim Reserves - Amendment

Work-Product Described

The Traditional Claim Reserve has these four conditions: (a) makes no provision for any safety margins; (b) may be based upon submitted claims (lag data) that include claims over the specific stop-loss limit thereby overstating the claim reserve; (c) does not account for claims that have been reported but are in a lengthy delay-in-processing status (e.g., COB, lawsuits, managed care network adjudications, Medicare Secondary adjustments) and (d) excludes claims settlement expenses. This Amendment makes specific provision for each of these four conditions.