Facility Association receives $24.8-million hit in February based on report of 2009 accident year losses

Facility Association (FA) took a somewhat unexpected, $24.8-million hit in February 2010, based on a late reporting of accident year 2009 losses.
FA anticipated the reporting of the 2009 accident year results in February, but the $24.8-million figure reported was “$19.9 million higher than expected,” FA said in a bulletin to members.
“About three-quarters of the $24.8-million increase is attributable to a single member company, which reported two months’ transactions in the month of February,” FA reported, adding that the 2009 claims normally would have been reported during the last two months of 2009.
Pending an actuarial analysis, FA said incurred-but-not-reported (IBNR) provisions pertaining to the accident years 2009 and prior “have been adjusted as a temporary measure, effectively offsetting the unexpected activity in the month of February 2010.”
As for 2010, FA said “to date, accident year 2010 losses are lower than projected, but we expect the ultimate loss ratio to move towards 139% as the year unfolds.”