Why does Comcover accumulate reserves?
Comcover follows conventional insurance practice and quarantines all losses for a particular year against the premiums received for that year. Therefore, each year Comcover needs to set aside an amount (reserves) to meet anticipated liabilities arising from claims for that year (please note that claims, particularly in the liability classes of insurance, may take a number of years to settle). The level of reserves required to meet outstanding liabilities remains a matter for periodic actuarial estimation until claims are actually settled. Comcover will use any accumulated surplus reserves to reduce future Fund Member premiums.
