Spring 2018 Q24
Hi, when asked about item E of the AOS, do you think I could say something like the following instead of "1 year reserve development to prior year surplus"? Or would it be safer to just say it as just mentioned?
"Regulators may use item E to see if the company may be under reserving (indicated by an IRIS Ratio 11 > 5% in at least 3 of the last 5 years )."
Comments
Your answer is technically correct but I think it would be safer to explicitly mention "1 year reserve development to prior year surplus" in your answer to make sure the graders see that you know what IRIS 11 represents. You don't want to leave any ambiguity for the grader.