CAS Exam 5 Fall 2019, Question 6

Study guide: Exam 5

Part a (1 point)

Discuss whether there is a need to explicitly account for the following costs in primary ratemaking:

i. Proportional reinsurance

ii. Non-proportional reinsurance

Part b (0.5 points)

Identify two sources of investment income considered in the total profit provision.

Part c (0.75 points)

Briefly discuss whether trending is necessary for the following:

i. Variable expenses

ii. Fixed expenses when using the exposure-based projection method

iii. Fixed expenses when using the premium-based projection method

Answer this question and see the worked solution

Concepts tested

• Expense Provisions
• Fixed Expenses
• Variable Expenses
• Reinsurance

More questions from this set

• CAS Exam 5 Fall 2019, Question 5
• CAS Exam 5 Fall 2019, Question 7