Does any one know why the answer is C (at least 62,500, but less than 70,000)? My answer is 75,000.

Here's the question:

Cal yr 2004 paid ulae = 25,000

Loss reserve at 12/31/2003 = 1,000,000

Cal yr 2004 loss payments = 250,000

Cal yr 2004 incurred losses = 500,000

IBNR % of loss reserve at 12/31/2004 = 20%

60% of a claim's ulae expense is paid when opened with the remaining expense paid at closing

Using the paid ulae to paid loss method, what is the ulae reserve as of 12/31/2004?

Here's the question:

Cal yr 2004 paid ulae = 25,000

Loss reserve at 12/31/2003 = 1,000,000

Cal yr 2004 loss payments = 250,000

Cal yr 2004 incurred losses = 500,000

IBNR % of loss reserve at 12/31/2004 = 20%

60% of a claim's ulae expense is paid when opened with the remaining expense paid at closing

Using the paid ulae to paid loss method, what is the ulae reserve as of 12/31/2004?

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