Question

What is the primary purpose of the reserving policy in insurance?

a.

To minimize the amount of reserves set aside for claims

b.

To ensure accurate estimates of reported claims are made

c.

To maximize profitability for the insurance company

d.

To expedite the claims handling process

Posted under IC 14 Regulations of Insurance Business

Answer: (b).To ensure accurate estimates of reported claims are made Explanation:The primary purpose of the reserving policy in insurance is to ensure that accurate estimates of reported claims are made. This helps reflect the ongoing performance of individual clients, portfolios, and the company as a whole, contributing to financial stability and risk management.

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Q. What is the primary purpose of the reserving policy in insurance?
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