Which statement describes the notation 24/18 in stop-loss?

Which statement describes the notation 24/18 in stop-loss?

• A. 24 months incurred and 18 months paid.
• B. 18 months incurred and 24 months paid.
• C. 24 months paid and 18 months incurred.
• D. 18 months paid and 24 months incurred.

Answer: (A)

In stop-loss notation, the two numbers show separate time windows: how long losses are measured as incurred, and how long losses are paid. The first value refers to incurred losses, the second to paid losses. So 24/18 means 24 months for losses that are incurred, and 18 months for losses that are paid. This reflects the idea that costs can accumulate over a longer period while actual payments may occur over a shorter window, capturing the timing difference between when losses happen and when money changes hands.

In stop-loss notation, the two numbers show separate time windows: how long losses are measured as incurred, and how long losses are paid. The first value refers to incurred losses, the second to paid losses. So 24/18 means 24 months for losses that are incurred, and 18 months for losses that are paid. This reflects the idea that costs can accumulate over a longer period while actual payments may occur over a shorter window, capturing the timing difference between when losses happen and when money changes hands.