3-89 The largest liability on property-casualty insurers' balance sheet as of year-end 2009 was

Question

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Loss reserve and loss adjustment expenses are the largest liability on property-casualty insurers' balance sheet as they represent the estimated cost of settling claims that have already been reported but not yet settled. This liability reflects the insurer's obligation to pay for future losses on policies that have already been written. Unearned premiums represent premiums received in advance for insurance that has not yet been provided, while policyholder surplus represents the insurer's net worth. Cash and conditional reserve funds are not liabilities on the balance sheet.

3-89 the Largest Liability on Property-Casualty Insurers' Balance Sheet as of Year-End