CAS Exam 5 Spring 2018, Question 6
Study guide: Exam 5
Given the following information for a medical association:
Cumulative Reported Claim Counts Evaluated as of Month:
| Accident Year | 12 | 24 | 36 | 48 | 60 | 72 |
|---|---|---|---|---|---|---|
| 2010 | 26 | 52 | 71 | 80 | 85 | 89 |
| 2011 | 37 | 54 | 70 | 82 | 84 | 85 |
| 2012 | 44 | 81 | 85 | 100 | 110 | 112 |
| 2013 | 19 | 44 | 59 | 67 | 70 | |
| 2014 | 15 | 44 | 72 | 83 | ||
| 2015 | 38 | 59 | 77 | |||
| 2016 | 33 | 65 | ||||
| 2017 | 30 |
| Claims-Made Year | Step Factor |
|---|---|
| First | 30% |
| Second | 60% |
| Third | 80% |
| Fourth | 90% |
| Fifth | 95% |
| Six and more | 100% |
- The medical association had claims-made policy coverages up until December 31, 2014.
- The claims-made policies have a retroactive date of January 1, 2010.
- The medical association switches to occurrence policies on January 1, 2015.
- All policies are annual.
- All policies incept January 1.
Part a (0.25 points)
Calculate the total reported claim counts covered under claims-made policies.
Part b (0.25 points)
Calculate the total reported claim counts covered under occurrence policies.
Part c (1 point)
Briefly describe the coverage gap and calculate the estimated number of ultimate claims falling in the gap for the medical association.
Part d (0.25 points)
Briefly describe a solution for the medical association to address the coverage gap in part c. above.
Answer this question and see the worked solution