Question

In insurance accounting, what does the "claims reserve"

Explanation The claims reserve is an amount set aside by the insurer to cover future claims that are likely to arise from insurance contracts.

represent?

A Amount set aside for investment purposes

B Amount paid by the policyholder as a premium

C Amount paid by the insurer to the policyholder as a claim

D Amount set aside to cover future claims

E Amount set aside for marketing expenses

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Solution