Section 2319.2 - Reserve Computation(a) Reserves shall reflect inflation and development projected to date of ultimate payment.(b) Reserves shall include provisions for an appropriate incurred-but-not-reported (IBNR) reserve based on the experience of the insurer or where experience is lacking based on reasonable actuarial assumptions applied to other experience. The reserve computation shall, where appropriate, estimate the expected number of claims yet to be reported from accident years prior to a statement date together with the corresponding incurred amount. The calculation of such expected claims shall give due consideration to changes in the exposure base.(c) Allocated and unallocated loss expense reserves shall be based on individual company experience or other reasonable evidence which measures the probable cost of liquidating claim liability. Ratios of paid expenses to paid losses may not be modified by arbitrary factors.Cal. Code Regs. Tit. 10, § 2319.2