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    Question

    In insurance accounting, what does the "claims reserve" represent?

    A Amount set aside for investment purposes Correct Answer Incorrect Answer
    B Amount paid by the policyholder as a premium Correct Answer Incorrect Answer
    C Amount paid by the insurer to the policyholder as a claim Correct Answer Incorrect Answer
    D Amount set aside to cover future claims Correct Answer Incorrect Answer
    E Amount set aside for marketing expenses Correct Answer Incorrect Answer

    Solution

    Explanation: The claims reserve is an amount set aside by the insurer to cover future claims that are likely to arise from insurance contracts.

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