CAS Exam 5 Spring 2014, Question 3
Study guide: Exam 5
For a single personal auto policy with an annual policy term:
- A = Calendar year 2013 written exposures as of December 31, 2013.
- B = Calendar year 2012 earned exposures + calendar year 2013 earned exposures as of February 1, 2013.
- C = Calendar year 2013 unearned exposures as of February 1, 2013.
- D = In-force exposures as of February 1, 2013.
- A < 0 < B < C < D.
- Exposure is earned uniformly throughout the policy term.
- This policy cancels mid-term.
Part a (1 point)
Provide the range of valid effective dates for this policy.
Part b (0.5 points)
Provide the range of valid dates of the mid-term cancellation for this policy.
Part c (0.75 points)
Demonstrate that it would never be possible to have A < 0 < B < C < D if B, C, and D were as of July 1, 2013 instead of February 1, 2013.
Answer this question and see the worked solution