Which item is disclosed under High Deductible policies?

• A. The reserve credit recognized for unpaid claims
• B. The insured's age distribution
• C. The regulatory capital ratio
• D. The actuarial present value of future premiums

Answer: (A)

High-deductible policies shift part of the loss burden to the insured. Because the insured pays the deductible before the insurer’s claims are paid, the insurer can recognize a reserve credit for the portion expected to be funded by the insured. This credit reduces the net liability for unpaid claims on the balance sheet. In other words, the disclosed item reflects the insured’s obligation to cover part of losses under the deductible, lowering the insurer’s unpaid-claims reserve accordingly.

The other items don’t directly relate to how high-deductible coverage changes the insurer’s claim reserves or disclosures, so they aren’t the specific high-deductible disclosure in question. For example, age distribution, regulatory capital ratio, or the actuarial present value of future premiums are not unique disclosures tied to the mechanics of high-deductible plans.