Which of the following is NOT a type of reserve?

The correct choice, which indicates that projected future reserves are not a type of reserve, is grounded in the definitions and functions of different reserve types utilized in workers' compensation and insurance contexts.

Reserves in workers' compensation are financial provisions that an insurance company makes to handle future claims. Each type serves a distinct purpose in representing anticipated losses. For example, formula reserves are calculated using specific statistical methods to estimate future claims based on historical data, while incurred but not reported (IBNR) reserves account for claims that have occurred but have not yet been reported to the insurer. Individual case reserves focus on the estimated cost of a specific claim that has been reported, taking into account the particulars of that claim.

Projected future reserves, on the other hand, are more about forecasting liabilities without a definitive process or reporting structure that characterizes true reserves. They may involve predictions about potential future claims but do not represent current obligations that the company has already incurred or is expected to be responsible for at this time. Hence, they do not fit the same categorization as the established types of reserves used within the industry for managing current and expected liabilities.

Understanding this distinction is crucial for an adjuster in ensuring accurate handling of claims and financial forecasts related to workers' compensation.