How often must an underwriter re-determine its reserve requirements?

An underwriter must re-determine its reserve requirements at least once per year to ensure that they align with the current financial conditions, claims experience, and potential future liabilities. This annual assessment is essential because it helps maintain adequate reserves to meet obligations arising from claims while ensuring the financial stability of the underwriter.

Regularly updating these reserve requirements is a regulatory expectation in many jurisdictions to manage risk effectively and ensure that the underwriter can cover its future liabilities. This process involves analyzing various factors, including claims trends, economic conditions, and changes in regulations, which can all impact the appropriate level of reserves needed.