PEMBAHASAN
Figure 9-12. characteristics of certain reserve[1]
Claim fluctuation reserve (statutory and GAAP) | - Enables the insurer to absorb unexpected claims experience while offering stable premiums to group medical insurance policyholders
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Premium Deficiency Reserve (Statutory only) | - Must be established when the valuation net premium exceeds the gross premium
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Contingency reserves (statutory only) | - Established voluntarily
- Serve as a cushion against future adverse experience
- Considered a surplus account on the balance sheet
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Interest Maintenance Reserve (IMR) (Statutory only) | - Absorbs capital gains and losses on certain investments caused by interest rate changes
- Gains and losses must be realized
- Covers bonds, mortgages, and preferred stock only
- Allows gains and losses to gradually affect the capital and surplus accounts
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Asset Valuation Reserve (AVR) (Statutory only) | - Absorbs credit-related capital gains and losses
- Absorbs realized and unrealized gains and losses
- Each year insurer must perform calculations in order to determine whether they must increase their AVR
- Allows gains and losses to gradually affect the capital and surplus account
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Jawaban: c. premium deficiency reserve
[1] Mulligan, E. and Stone, G. (1997). Accounting and financial reporting in life and health insurance companies. Atlanta, Ga.: Life Management Institute, LOMA.