[[Actuarial Notes Wiki|Wiki]] / [[Exam 5 (CAS)]] / **Case Adequacy** ## Definition ==Case Adequacy== is the measure of whether case reserves (claim-specific reserve estimates) are sufficient to cover the ultimate settlement costs of reported claims. ## Assessment Methods ### Development Analysis ``` Track paid vs. case over time: If payments consistently exceed case reserves: → Cases are inadequate If payments less than reserves: → Cases may be redundant ``` ### Paid-to-Incurred Ratios ``` Ratio increasing over time suggests: - Cases developing beyond expectations - Possible inadequacy Ratio stable suggests: - Adequate case reserves ``` ## Impact on Methods - Inadequate cases → Use Berquist-Sherman - Changes over time → Affects development patterns - Stable adequacy → Standard methods work well ## Related Concepts - [[Case Reserves#Definition]] - [[Berquist-Sherman Method#Definition]] ## References - Friedland, Chapter 7