Exam 5 Practice Question 4
Study guide: Exam 5
A reinsurer writes annual reinsurance contracts incepting throughout each year and is choosing between underwriting-year and accident-year aggregation of its claims data for a reserve analysis.
Determine which of the following statements are true.
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I. Underwriting-year data match the claims and the premium arising from the same block of reinsurance contracts.
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II. Because underwriting-year data group contracts by inception date, the ultimate claims of an underwriting year can generally be estimated reliably sooner than those of the corresponding accident year.
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III. The effect of a major court ruling that changes how contracts are interpreted is easier to isolate in underwriting-year data than in accident-year data.
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A) I only
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B) I and II only
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C) I and III only
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D) II and III only
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E) The answer is not given by (A), (B), (C), or (D)
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