Question for actuaries signing health reserve opinions: How much conservatism in IBNR is "too much"?
Looking at a mid-size company that has consistently favorable IBNR restatement (i.e., they rarely/never have unfavorable restatement). They understand they're over-accrued, but are comfortable with it as a management strategy (the board doesn't want any unfavorable surprises). They're probably 5-7% over-accrued, and this is in addition to margin and LAE. Their position is also that they want to be at least 99% confident they have enough IBNR to cover their claims runout.
Wondering what items folks would consider when deciding whether to consider a Qualified vs. Adverse opinion.
Thanks!
Looking at a mid-size company that has consistently favorable IBNR restatement (i.e., they rarely/never have unfavorable restatement). They understand they're over-accrued, but are comfortable with it as a management strategy (the board doesn't want any unfavorable surprises). They're probably 5-7% over-accrued, and this is in addition to margin and LAE. Their position is also that they want to be at least 99% confident they have enough IBNR to cover their claims runout.
Wondering what items folks would consider when deciding whether to consider a Qualified vs. Adverse opinion.
Thanks!
Q. for signers of health reserve opinions: consistently favorable IBNR restatement?