"Settlements are often done several months after the period ends, so reserves play a minimal role."
Does the author mean the practical definition of Reserves (Reserves + Liabilities) or the technical definition of Reserves = amounts not yet incurred and that will accrue in the future for contingent payments.
Months after the settlement, I see the need to hold a liability - (technical definition: known amount incurred and accrued, but not paid).
But not a reserve - amounts not yet incurred and that will accrue in the future. (Technical definition)
So it would be correct to say that liabilities do not play a minimal role?
I guess that has to be it because this is under "calculating provider liabilities".
Why did the SOA have to ask that stupid question that makes me second guess what is meant by liability and reserve every time I read them.
Does the author mean the practical definition of Reserves (Reserves + Liabilities) or the technical definition of Reserves = amounts not yet incurred and that will accrue in the future for contingent payments.
Months after the settlement, I see the need to hold a liability - (technical definition: known amount incurred and accrued, but not paid).
But not a reserve - amounts not yet incurred and that will accrue in the future. (Technical definition)
So it would be correct to say that liabilities do not play a minimal role?
I guess that has to be it because this is under "calculating provider liabilities".
Why did the SOA have to ask that stupid question that makes me second guess what is meant by liability and reserve every time I read them.
Mate Card on: Methods for Calculating Provider Liab
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