Should excess carrier claims be reported on the annual report?

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

Should excess carrier claims be reported on the annual report?

Explanation:
In a self‑insurance plan, the annual report should reflect only the losses that the plan itself is responsible for up to its self‑insured retention. An excess carrier provides coverage beyond that retention, so the claims handled by the excess insurer are outside the plan’s own liabilities. The annual report does not include those excess claims as part of the SIP’s obligations. The only related disclosure would be notes or assets related to potential recoveries from the excess carrier (if recoveries are probable), not the excess claims themselves. So excess carrier claims are not reported on the annual report, making the statement false.

In a self‑insurance plan, the annual report should reflect only the losses that the plan itself is responsible for up to its self‑insured retention. An excess carrier provides coverage beyond that retention, so the claims handled by the excess insurer are outside the plan’s own liabilities. The annual report does not include those excess claims as part of the SIP’s obligations. The only related disclosure would be notes or assets related to potential recoveries from the excess carrier (if recoveries are probable), not the excess claims themselves.

So excess carrier claims are not reported on the annual report, making the statement false.

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