What components are included in your reserves?

Reserves in risk management and insurance refer to the funds set aside to pay for future liabilities and claims. The correct choice highlights key components that accurately reflect the types of financial obligations an organization must record.

Including DW losses (which stand for deductible waiver losses), subrogation bad debt, and disputed claims within reserves is crucial because these elements represent anticipated future payouts that the organization may need to address.

• DW losses refer to amounts that may need to be paid out as part of a claim's deductible under certain circumstances, indicating a financial responsibility that needs to be accounted for.

• Subrogation bad debt relates to uncollected amounts that can arise when one insurance company seeks compensation from another following a payout on a claim. These potential losses must be reserved for, as they are likely to affect the overall financial liability of the insurer.

• Disputed claims are at the heart of assessing reserves because these are claims that have not yet been settled but may result in payment once resolved. They require careful consideration in reserve calculations since they could lead to substantial payouts if the disputes are settled in favor of the claimant.

The inclusion of these specific components provides a comprehensive view of the financial exposure an organization may have concerning its insured risks. In contrast, the other options