Incorrect reserve adequacy assessments can lead to false orincomplete findings, uninformed management decisions andunfavorable outcomes, not to mention a possible wrongfultermination suit by the claims manager.

Why do so many organizations struggle with reserve adequacyassessments? Frequently, those carrying out the review are notassessing the appropriate criteria to fully evaluate reserveadequacy or the root causes of deficiencies. Recommendations oftendo not align with findings, organizational objectives, goals ormeans.

Reserve assessments without an appropriate foundation anddocumentation have little credibility and are of questionablevalue. It's always better to have a well-reasoned discussion of thefacts, issues and coverages afforded, addressing who is responsiblefor paying the loss and how much should be paid to resolve theclaim.

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