CAS Exam 6C Spring 2017, Question 7
Study guide: Exam 6C
The Facility Association accomplishes its mission of ensuring automobile insurance availability through two types of risk sharing mechanism: risk sharing pools (RSP) and the Facility Association residual market (FARM).
Part a (0.5 points)
Briefly describe the key purpose of each risk sharing mechanism: RSP and FARM.
Part b (2 points)
Compare and contrast RSP and FARM with respect to:
- i. Rates and rules
- ii. Servicing carriers
- iii. Policyholder awareness
- iv. Treatment of losses in Ontario Private Passenger Automobile rate filing
Part c (1 point)
Identify four classes of business that determine a member's participation in the Facility Association results.
Answer this question and see the worked solution