Math 490 568 Casualty Actuarial Mathematics

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Math 490 / 568 Casualty Actuarial Mathematics

• Fall 2009
• University of Illinois at Urbana-Champaign
• Professor Rick Gorvett
• Session 12 Claims-Made vs. Occurrence
• October 8, 2009

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Bases of Coverage

• Occurrence insurance policy coverage is
  triggered based on the date that the loss occurs
• Claims-Made insurance policy coverage is
  triggered based on the date the claim is made, or
  reported, to the insurance company
• Policy covers losses or incidents which are
  reported during the policy period
• Common for med mal and products liability

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Coverage Issues

• Retroactive Date policy will cover claims
  reported during the policy period, but only if
  the incident actually occurred on or after the
  retroactive date
• Helps facilitate and clarify switch in policies
  e.g., from occurrence to claims-made
• Example
• Occurrence policy in 2008
• Claims-made policy in 2009
• Which policy covers a 2008 occurrence reported in
  2009?
• ? C-M policy needs a 1/1/09 retroactive date to
  avoid ambiguity

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Coverage Issues (cont.)

• Tail Coverage when an insured stops purchasing
  claims-made coverage, claims occurring during the
  C-M period but reported after the C-M period
  would not be covered unless there is tail
  coverage
• If switch from C-M to occurrence coverage
• If move C-M coverage to another insurer
• If stop buying insurance altogether

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2008 CAS Exam 5, Problem 21
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2008 CAS Exam 5, Problem 20
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2007 CAS Exam 5, Problem 13