Hi, my name is Alan freezin, certified Employee Benefit Specialist with another tip on how to get the best value out of your employee benefit program. So this is more of an explanation of a concept or a factor that comes into your rates called incurred but not reported reserve or IVR. So when claims are reported to you, and the insurer provides that report to you that gets used in your renewal rate calculations, a part of the claims that are reported are actually to do with this incurred but not reported. And so what this means is, is that if there's a period of time when your claims are based on so let's say September one to August 31, so all the claims that are incurred in that period of time, and paid in that period of time are your paid claims. But if you had a claim that was incurred on August 30th, obviously wouldn't be paid during that period of time, but it has been incurred during that period of time.

So it'll get paid in the next Next period. So that is what the incurred but not reported is so is basically a lag between when the claims incurred and the claim is actually paid. So why this is important for you to know is that that is a factor that's built into your rates. So when you see your incurred claims showing a value of let's say 2000, or $20,280, is what the value is, well, a chunk of that is to do with claims that were incurred and then paid later. Initially, the insurer estimates what that incurred but not reported reserve is. So why this is important to know is that these claims, one that you're paid claims aren't exactly going to be what you're what they're being reported to you.

Because of that lag, especially the first year, first year, the insurer is going to estimate a value for what that lag will be. And if you leave your insurer go to another insurer while those reasons reserves that were there that incurred but not reported you leave behind you. So then you restart that fresh with a new insurer. There is a little bit of a kind of a soft claiming period when the old insurer is paying claims that were incurred in the previous period. And that varies with how long the claims are valid for whether they have to be submitted within three months or six months or a year. But the fact is, there is a reserve component that's built into the rate not just on extended health and dental but also on life and disability coverages.

So those components are something you should have a knowledge about. Have some knowledge about, and especially your advisor should have some knowledge about that to ensure that you are getting the best value and those are managed as well. Thank you much. I hope that's a value to my contact information is at the end of the video. Give me a call if I can assist you and keep well thanks much