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statement forms (Annual Statements) promulgated by the National
Association of Insurance Commissioners (NAIC) to calculate the
amount and to report minimum reserves that insurance companies
are required to maintain with respect to their outstanding
individual and group health insurance policies. See, e.g., Cal.
Code Regs. tit. 10, secs. 2311-2315 (1999).
Since the 1930's, on December 31 of each year (the valuation
date), life and accident and health (LA&H) insurance companies
have been required under the above NAIC regulations to report on
the Annual Statements the amount of their particular obligations
either as “liabilities” or as “reserves”.
Liabilities, as reflected on Exhibit 11 of the Annual
Statements, correspond to claims for which the insurance
companies are currently liable including estimates of claims that
as of the valuation date have accrued but that have not yet been
reported to the companies.
Reserves, as reflected on Exhibits 8 and 9 of the Annual
Statements, correspond to claims (computed using recognized
mortality and morbidity tables) for which the insurance companies
as of the valuation date are expected to become liable some time
in the future. On the Annual Statements, liabilities correspond
to accrued claims, and reserves correspond to unaccrued claims.
For the years in issue, the following schedule reflects, as
indicated on its Annual Statements, the computation by Best Life
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Last modified: May 25, 2011