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Question 1 of 10
1. Question
In Ratemaking, The method of a well-designed risk classification includes
Correct
Examples include methods used to promote loss control.
Incorrect
Examples include methods used to promote loss control.
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Question 2 of 10
2. Question
In rate-making, if prices were to increase and decrease for purposes unknown by the policyholders,
Correct
If policyholders don’t have a sense of clearance with the rise and fall of rates, consumers will start doubting the company.
Incorrect
If policyholders don’t have a sense of clearance with the rise and fall of rates, consumers will start doubting the company.
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Question 3 of 10
3. Question
It would be hard to encourage loss control if,
Correct
Thus, agents and brokers must be able to work with the insurer’s rate manual.
Incorrect
Thus, agents and brokers must be able to work with the insurer’s rate manual.
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Question 4 of 10
4. Question
Which option best defines incurred losses for the calendar year Z?
Correct
Hence, incurred losses for calendar Z does not communicate to any particular accident period or any particular policy period.
Incorrect
Hence, incurred losses for calendar Z does not communicate to any particular accident period or any particular policy period.
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Question 5 of 10
5. Question
In rate-making, a good exposure should be,
Correct
For a good exposure, an accurate measurement should be done by quantitative exposure to loss.
Incorrect
For a good exposure, an accurate measurement should be done by quantitative exposure to loss.
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Question 6 of 10
6. Question
The rate-making actuary will require to estimate,
Correct
The estimate will be based on past experience period data.
Incorrect
The estimate will be based on past experience period data.
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Question 7 of 10
7. Question
Beyond the technicalities of the curve fitting, the actuary could use
Correct
This predicted value could be estimated using a procedure that implicitly assigns equal weight to each year in the experience period.
Incorrect
This predicted value could be estimated using a procedure that implicitly assigns equal weight to each year in the experience period.
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Question 8 of 10
8. Question
The trend factor is commonly the unique most crucial input parameter in the rate-making process that
Correct
The actuary is proved in contributing a considerable amount of time and effort to this aspect.
Incorrect
The actuary is proved in contributing a considerable amount of time and effort to this aspect.
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Question 9 of 10
9. Question
Because of the competing nature of the property/ casualty business,
Correct
If rates are too high, it will lose businesses, and if too low, the insurer can await to have underwriting losses.
Incorrect
If rates are too high, it will lose businesses, and if too low, the insurer can await to have underwriting losses.
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Question 10 of 10
10. Question
If the experience period loss ratio at current rates for all three classes had been the same,
Correct
The size of the experience period loss ratio is pointless at this stage.
Incorrect
The size of the experience period loss ratio is pointless at this stage.