Which of the following statements about methods for estimating loss reserves for property and casualty insurers is (are) true?
I.The judgment method involves the use of a statutory formula to estimate the loss reserve.
II.The average value method is used when the number of claims is large and the claims are settled quickly.
A) I only
B) II only
C) both I and II
D) neither I nor II

Question

Quizplus · Accepted Answer

The judgment method does not involve a statutory formula; it relies on the experience and judgment of the actuary. The average value method is indeed used when there are many claims that are settled quickly.

Which of the Following Statements About Methods for Estimating Loss