Although recently the subject of some attention by the NAIC, premium deficiency reserves (PDRs) do not always receive the attention they deserve. All companies are required under statutory accounting principles (SAP) and generally accepted accounting principles (GAAP) to determine whether they need a PDR, but the reserve is rarely carried and may not be fully understood, perhaps because it is part of the unearned premium reserve and not subject to an actuarial opinion. This session will first describe the relevant accounting and actuarial guidance and discuss the basic approach to determining whether a PDR is necessary and how much it should be. The second part of the session will discuss some of the common issues and challenges surrounding the PDR and will emphasize why this reserve may be more important than is commonly recognized, particularly in a soft market.