CAS Exam 6C Fall 2014, Question 11
Study guide: Exam 6C
Part a (0.5 points)
Explain why it is difficult to measure the full costs of an involuntary exit of an insurance company.
Part b (0.5 points)
An insured has an automobile policy with a company that has become insolvent.
Given the following:
| Item | Value |
|---|---|
| Policy effective date | July 1, 2013 |
| Policy premium | $2,500 |
| Deductible | $1,000 |
| Policyholder outstanding claim | $275,000 |
| Insolvency date | December 1, 2013 |
Calculate the amount paid to this policyholder by the Property and Casualty Insurance Compensation Corporation (PACICC).
Answer this question and see the worked solution