reserve for losses

reserve for losses

An accounting entry made to set aside a fund for payment of possible future liabilities as a result of litigation or similar claims. If a tenant is injured after falling from a defective balcony at an apartment,that tenant might sue for damages.The apartment complex might have liability insurance, but there could be a very large deductible. If there is no doubt about the fall, no doubt about the landlord's liability,and the only issue is regarding the size of the check to the tenant,the landlord knows he or she will eventually have to pay up to the deductible limits for the injury. As a result,the landlord will probably set aside a reserve for losses in that amount.

Mentioned in ?
References in periodicals archive ?
0 million based on the adequacy of the Company's September 30, 2010 reserves for losses and loss adjustment expenses compared to a predetermined targeted reserve for losses and loss adjustment expenses.
Section 166 (and related IRC sections 585 and 593) allow mortgagees using the reserve method of accounting for bad debts to charge the loss to the reserve for losses on qualifying real property loans.
The recharacterization will have virtually no impact on AIG's financial condition as of December 31, 2004, but will reduce the reserve for losses and loss expenses by $250 million and increase other liabilities by $245 million.
Mortgage Insurance Operations due to increases in paid claims and loss adjustment expenses and additions to the reserve for losses (collectively "losses and LAE"), partially offset by higher net income from International Operations.
Management believes that this charge will establish a reasonable reserve for losses resulting from the disposition of the hospitality services group and operating losses from the group after the second quarter until the group is sold.
Mortgage Insurance Operations due to increases in paid claims, loss adjustment expenses and additions to the reserve for losses (collectively "Losses and LAE") and an other-than-temporary impairment of the Company's investment in FGIC.
7, 1998--Capital Re Corporation (NYSE:KRE) announced today that in the third quarter it will increase its case basis loss reserve for losses arising from the bankruptcy of the Delaware Valley Obligated Group, a unit of Pittsburgh-based Allegheny Health, Education and Research Foundation ("Allegheny").
In addition, CTBI will make a special provision of $7,250,000 to the Reserve for Losses on Loans to clean up problems in the Indirect Loan Portfolio.
3 million in paid claims, loss adjustment expenses and additions to the reserve for losses (collectively "Losses and LAE") in the U.
Liabilities Deferred premium revenue $ 391,746 $ 337,104 Reserve for losses and loss adjustment expenses 23,012 19,902 Profit commission liability 18,732 13,329 Deferred federal income taxes payable 62,565 58,474 Bank note payable 25,000 25,000 Long-term debt 74,800 74,781 Liability for securities purchased 80,380 42,749 Other liabilities 45,867 20,666 Total liablilities $ 722,102 $ 592,005
5% Reserve for losses by category (In thousands): Prime $200,262 $181,001 Alt-A 146,329 135,336 A minus and below 228,066 195,246 Pool Insurance 34,599 36,199 Seconds 38,347 30,144 Other 900 9,188 Reserve for losses, net 648,503 587,114 Reinsurance recoverable 28,188(1) - Total $676,691 $587,114 (1) Reinsurance recoverable on a first-loss second lien captive.
C) -- In 1993 reflects a recovery of $745,000 from an asset previously written off, net of a write-off of $235,000 in goodwill, establishment of a $400,000 reserve for losses on real estate owned, and $116,000 gain on sale of office facility.