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“liabilities”, and it uses the word “accrual” to distinguish
current obligations from future obligations.2 A reserve is an
unaccrued claim for which the insurer will become liable in the
future; e.g., the future rehabilitation expenses described supra
note 1. A liability is an accrued claim for which the insurer is
liable now; e.g., the emergency room expenses described supra
note 1. Exhibit 8 of the annual statement lists an insurer's
“Aggregate Reserve for Life Policies and Contracts”. Exhibit 9
lists an insurer's “Aggregate Reserve for Accident and Health
Policies”. Exhibit 11 lists an insurer's “Policy and Contract
Claims”; data on these claims is listed separately as to yearend
liabilities for life insurance and A&H insurance.
Central Life filed its 1990 through 1992 annual statements
with the Ohio Department of Insurance. As relevant herein,
Central Life reported its claim obligations on life insurance
policies and annuities on exhibits 8 and 11, and it reported its
claim obligations on A&H insurance policies on exhibits 9 and 11.
Central Life reported its unaccrued claim obligations for life
insurance and A&H insurance as reserves on exhibits 8 and 9,
respectively, and it reported all of its accrued claim
obligations as liabilities on exhibit 11. During 1990 and 1991,
2 The use of the word “accrual” in the insurance industry
does not conform to the definition of that word under Generally
Accepted Accounting Principles.
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