Exam 5 Practice Question 2
Study guide: Exam 5
An actuary is preparing an analysis from an insurer's paid claim data. In total the data reconcile to the insurer's financial statements within 0.1%. Reviewing the detail, the actuary finds several large negative paid claim amounts in one accident year, material to that year's results.
Which response is most appropriate?
- A) Delete the negative records before the analysis, since negative paid claims are data errors
- B) Proceed without further review, since the data reconcile to externally audited statements
- C) Require a formal audit of the claim data before any estimate is produced from it
- D) Replace that accident year's paid data with an industry benchmark pattern
- E) Find out what the negative amounts represent before using them, and document the review
Answer this question and see the worked solution