Why, after being reimbursed in the quarterly disbursements, is our company paying an Annual Cash Settlement bill?
A8: Quarterly transactions are meant to approximate the latest years Annual Cash Settlement results. Your companys net reimbursements from the quarterly transactions are fully reflected in the Annual Cash Settlement True-up Report. The differences between the procedures used for the quarterly transactions and the Annual cash Settlement are as follows: Differences in the Latest Accident Year The quarterly transactions for an accident year are performed using exposures that, for operational reasons, lag behind the actual years exposures by two quarters. The Annual Cash Settlement (Pure Exposure Method) uses the actual years exposures. Differences due to the Reevaluation of Prior Accident Years For years where the Pure Claims method is used, only claims are involved. Depending on how your companys claim experience differs from that of other companies, your results for an accident year are subject to change. In all cases, should the estimate of the ultimate Reportable losses change, the An
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