LAT – Liability Adequacy Test

International Financial Reporting Standard 4 required liability adequacy testing (LAT). In non-life insurance, the most important components of LAT are run off analysis for claims provisions and unexpired risk reserve (URR) calculation. URR is defined as a prospective assessment of the amount that needs to be set aside in orders to provide for the claims and expenses which will emerge from unexpired risks and which is over and above the unearned premium reserve…

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