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an indicated margin. The indicated loss reserve margin
is defined to be the carried loss reserve minus the
indicated loss reserve.

One should not generally expect the margin to be zero,
since for any subset of an entity's business it is unlikely
that the carried loss reserve will be identical to either
the indicated or required loss reserve.

Q4. Discuss the four principles regarding
property and casualty loss and loss
adjustment expense reserve.

Ans. The following are the four principles regarding property
and casualty loss adjustment expense reserve :
(i) The first principle says that an actuarially sound loss
reserve ' for defined group of claims as of a given
valuation date is a provision, based on estimates
derived from reasonable assumptions and
appropriate actuarial methods, for the unpaid amount
required to settle all claims, whether reported or not,
for which liability exists on a particular accounting
date'.

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