A reserve established for tracking an individual claim is called what?

A reserve established for tracking an individual claim is called what?

• A. Case reserve
• B. Catastrophe reserve
• C. A reserve for a group of claims
• D. Unallocated reserve

Answer: (D)

A reserve established for tracking an individual claim is a case reserve. A case reserve is the amount the insurer estimates will eventually be paid to settle that specific claim, based on the facts known at the time (injuries, medical costs, liability, policy limits, etc.). It’s adjusted as new information comes in, such as medical updates or settlement talks, to reflect the evolving expected cost of that single claim. This is distinct from a catastrophe reserve, which covers many claims from a single large event; a reserve for a group of claims, which isn’t tied to any one claim; and an unallocated reserve, which is not linked to a specific claim and covers general or unassigned losses.

A reserve established for tracking an individual claim is a case reserve. A case reserve is the amount the insurer estimates will eventually be paid to settle that specific claim, based on the facts known at the time (injuries, medical costs, liability, policy limits, etc.). It’s adjusted as new information comes in, such as medical updates or settlement talks, to reflect the evolving expected cost of that single claim. This is distinct from a catastrophe reserve, which covers many claims from a single large event; a reserve for a group of claims, which isn’t tied to any one claim; and an unallocated reserve, which is not linked to a specific claim and covers general or unassigned losses.