Statutory Opinions

Items Opined Upon Within the SAO

The SAOs all require us to consider:

• Gross earned claims provisions; these consist of the gross case estimates (“outstanding claims”) plus future adjustments to the case estimates and provisions for gross claims that have not yet been reported (collectively, the “Incurred But Not Reported”, or “IBNR” claims) on earned business.
• Unearned premiums (together with any necessary additional unexpired risk reserve)
• Unallocated Loss Adjustment Expenses (ULAE).  This is discussed in more detail below.

The Solvency SAO also requires us to consider the earned provisions net of reinsurers’ share.  This requires us to consider:

• Expected reinsurance recoveries on the outstanding claims and the earned IBNR.
• Bad Debt on these recoveries.  Bad Debt is discussed elsewhere on this website.

What Statutory Work do we do?

Unallocated Loss Adjustment Expenses