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Actuary reports higher incurred-but-not-reported estimate; board accepts reserve recommendation
Summary
An actuarial update raised Mohave County's IBNR (incurred-but-not-reported) estimate to about $3.1 million and recommended a total reserve near $10.5 million; the board reviewed the methodology, discussed monitoring and accepted the recommendation.
Mohave County trustees accepted an actuarial update that raised the trust's incurred-but-not-reported (IBNR) estimate to roughly $3.1 million and recommended a total reserve (IBNR plus contingency for claim fluctuation) of about $10.5 million.
Chris Marshall, the actuary, said two primary factors drove the roughly 14% increase in the IBNR from the prior estimate: a small slowing in claim reporting lag and an increase in recent claim payments. "Your claims for the last 6 months are increased a lot, and that's ultimately what most of the lag is based off of the most recent claims," Marshall said.
Staff noted that the reserve calculation is a point-in-time estimate as of June 30, 2025, and that the actuary27s recommendation would be updated annually; trustees asked about the timetable for budgeting and whether a midyear update would help inform premium-setting. Finance staff said the budget uses the best available actuarial guidance at the time the county builds the FY26 budget and that they would explore a midyear estimate to help bridge the timing gap between actuarial point estimates and the county budget calendar.
A trustee moved to approve the actuary's 20242D25 IBNR report and reserve recommendation; the motion was seconded and the board voted to accept the report. Staff said the trust remains well reserved relative to the recommendation and will continue to monitor claims and actuarial calculations.
