CAS Exam 5 Spring 2017, Question 12
Study guide: Exam 5
Given the following information regarding an experience rating plan:
- Reported losses and ALAE limited by basic limits and maximum single limit per occurrence (MSL) for the policy being rated as of March 31, 2016 = $175,000.
- Company subject basic limit loss and ALAE for experience period = $225,000.
- Expected experience ratio = 0.875.
- Expected percentage basic limit loss and ALAE for experience period unreported at March 31, 2016 = 0.425.
- Credibility = 0.35.
Part a (1 point)
Calculate the experience modification factor.
Part b (0.25 points)
Briefly describe a scenario in which it would be appropriate for schedule rating to be used in addition to experience rating.
Answer this question and see the worked solution
Concepts tested
- Experience Rating
- Schedule Rating
- Credibility
- Allocated Loss Adjustment Expense
- Commercial Lines Rating