Theoretical and Applied Economics
No. 12 / 2009 (541)
Substantiating the Incurred but not Reported Reserve
The Bucharest Academy of Economic Studies
Daniel Armeanu
The Bucharest Academy of Economic Studies
Abstract. In order to handle past and future liability taken by insurance contracts concluded, any insurance company must constitute and maintain technical reserves. Substantiating technical reserves is done through actuarial methods and its over-evaluation or under-evaluation influence solvency and financial performance of the insurance companies, in the sense of reducing solvency through over-evaluating reserves and, respectively, influencing profit (hence of outstanding tax) through under-evaluating reserves. An important reserve for insurance companies is represented by the incurred but not reported reserve, as it allows the estimation of the liability the company may confront in the future, generated by events occurred in the past, which are not currently known in the present but will be reported in the future.
Contents
The Security of the Dynamic Systems
Substantiating the Incurred but not Reported Reserve
On the Dynamic Relationships between the Non-profit and Public Providers of Welfare Services in European Union
Reconfiguring the Financial Markets
The Play Element and Marketing Policies
Analysis over Critical Issues of Implementation or Non-implementation of the ABC Method in Romania