Which of the following statements about case reserves is true?

The statement that case reserves are estimates of the losses on claims that have occurred but are not yet paid accurately reflects the purpose and nature of case reserves in insurance operations. Case reserves are set aside by insurance companies for each individual claim that has been reported but not yet settled. This means they represent an insurer's estimate of the financial liability for those claims, based on available information and projections of future payouts.

These reserves are crucial for maintaining the financial health of the insurer, as they help ensure that the company has sufficient funds allocated to cover future payments related to claims. The estimation process involves analyzing various factors, including the nature of the loss, the details of the claim, and historical data on similar claims.

The other options do not accurately describe case reserves. They are not restricted to serious claims, as reserves can be established for any claim reported, regardless of its severity. Additionally, case reserves typically decrease as claims are paid and settled, not increase. Lastly, they are not determined as a fixed percentage of all premiums collected; rather, they are specifically calculated based on individual claim estimates.