The total of the individual estimates of outstanding liability for recorded claims is the:

Question

Options

• Acase reserve
• Boccurrence reserve
• Cadjustment reserve
• Dengaging reserve

• A
  72% (26)
• B
  6% (2)
• C
  6% (2)
• D
  17% (6)

Explanation

Case reserve (A) is correct because it represents the sum of individual claim-by-claim estimates set aside for each specific recorded (reported) claim that has not yet been fully settled - exactly what the question describes.

Why the distractors are wrong:

• B. Occurrence reserve - this relates to losses from a specific accident period or event, not individual claim estimates summed together.
• C. Adjustment reserve - not a standard insurance reserving term; sometimes confused with loss adjustment expense reserves (LAE), which cover the cost of settling claims, not the liability for the claims themselves.
• D. Engaging reserve - not a real insurance/actuarial term at all; a pure distractor.

Memory tip: Think of "case" as each individual court case or file folder on a claims adjuster's desk - the case reserve is what you'd find if you added up every folder's estimated payout. If it's recorded and specific, it's a case reserve.

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