Under which basis are claims reported in the period they are identified?

The claims-made basis is designed to report claims in the period they are actually identified, regardless of when the incident that triggered the claim occurred. This method is particularly significant in areas such as malpractice insurance, where scenarios arise long after an incident has taken place.

Under this basis, liability is established only when a claim is formally made against the policy during the policy period. This means that if an event occurs in one period but the claim is not reported until a later period, it will count for the years when the claim is made, not when the event transpired. This is crucial for insurers and healthcare providers as it aligns the recognition of expenses and potential liabilities with the actual identification of claims, ensuring financial statements accurately reflect the organization's risk exposure.

By contrast, other bases such as occurrence and retrospective may include claims that arise from past events or allow for the adjustments of estimates but do not specifically focus on the identification period, which is what makes the claims-made basis unique and applicable in this context.