See the full video at https://rumble.com/vfdwhn-a-video-explaining-setting-insurance-reserves.html and at https://youtu.be/fIX1
Reserves should be set realistically and registered in the claim file. Reserves are the adjuster's estimate of the potential recovery that the applicant would receive from a jury. The reserves should be reviewed regularly and revised as necessary. Failure to do so may be a factor in holding the insurer liable for an excessive judgment. Kunkle v United Security 168 N.W. 2d 723 (S.D. 1969). (For further assistance in setting reserves see Chapter 13, “Evaluation and Settlement.”) New York uses a definition of insurance reserves that can be used anywhere.
It defines insurance reserves as:
The referenced provision states that: every insurer shall. . . maintain reserves in an amount estimated in the sum to provide for payment of any losses or receivables that occurred before or before the reporting date, either reported or unreported, which are unpaid from that date and for which such insurance company may be liable and also reserves an amount estimated to provide costs for the adjustment or settlement of such losses or receivables (Insurance Act 1303 [emphasis supplied]). Majewski v Broadalbin-Perth Central School District, 91 N.Y. 2d 577, 696 N.E. 2d 978, 673 N.Y.S. 2d 966 (NY 05/12/1998).
When the court is challenged to discover information on insurance reserves, the court must make a preliminary assessment of whether the requested information is relevant in that it is permissible or reasonably calculated to lead to the discovery of permissible evidence. In deciding on the relevance of information on insurance reserves, the court should take into account the nature of the case, the methods used by the insurer to determine the reserves and the purpose for which the information is sought. and grant requests for disclosure only when its conclusions on facts and conclusions in law support a determination that the specific facts of the claim in the case directly and primarily affected the determination of the reserves in question. [ Stat ex rel. Erie Ins. Co. v. Mazzone 625 SE2d 355, 218 W.Va. 593 (W. Va., 2005)]
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance management, insurance fraud and near-fraud fraud. for insurance companies and policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.
For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become insurance claims staff.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the library for insurance claims – https://zalma.com/blog/insurance-claims-  bibliotek / Read posts from Barry Zalma at https://parler.com/profile / Hymn / post; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/