Among the lines falling further into reserve deficiency
2012 are Workers' Compensation and Financial Guaranty.
Competition for "good" workers compensation risk in other states will build now that much of the reserve deficiency
has been funded and accident year results for 2004 through 2007 have been profitable.
Insurers have increased rates, strengthened reserves, and reduced the reserve deficiency
that we have been tracking for at least the past seven years.
The Board also approved a related technical amendment to the reserve deficiency
penalty provision of Regulation D (Reserve Requirements of Depository Institutions).
Applicable Criteria and Related Research: Asbestos Losses: Continued Source of Reserve Deficiency
The bulk of the industry's total all lines non-A&E reserve deficiency
is derived from accident years 2003 and prior; the total deficiency associated with these accident years is $26.
Yet, with the strengthening investment income and much of the reserve deficiency
addressed, there will be increasing pressure within carriers to again compete actively for profitable segments of business.
The disposition of any over earnings is at the discretion of the FPSC, with alternatives including refunding to customers, adding the over earnings to the storm damage reserves, funding environmental reserves or reducing any depreciation reserve deficiency
In particular, the workers' compensation segment exhibits a significant reserve deficiency
, while other liability occurrence and medical professional liability lines continue to show material reserve redundancies,' Auden added.
estimates P-C reserve deficiency
improved nearly $17 billion from $24.
The National Council on Compensation Insurance (NCCI) estimates the reserve deficiency
for workers' compensation on the financial statements of insurers to be $18 billion at the end of 2002.
As of 2002, the workers' comp market had a $21 billion reserve deficiency
, he said.