In insurance, IBNR means the event has happened, but the claim has not yet been reported.

• A. The claim has been paid.
• B. The event has happened and the claim has been reported.
• C. The event has happened, but the claim has not yet been reported.
• D. The claim is under review.

Answer: (C)

IBNR means losses that have already occurred but have not yet been reported to the insurer. The statement that the event has happened and the claim has not yet been reported matches this exactly, which is why it’s the correct interpretation. If a claim has been paid, the claim has been reported and settled, so it’s not IBNR. If the event happened and the claim has been reported, the claim is in the reported/filing process, not unreported. If the claim is under review, that reflects a status of a reported claim, again not IBNR. The essence is money to cover losses that have occurred but are still unreported.