CAS Exam 6C Spring 2018, Question 12

Study guide: Exam 6C

Part a (0.25 points)

Briefly describe the objective of the Facility Association.

Part b (1 point)

Contrast the operations of the Facility Association Residual Market (FARM) and Risk Sharing Pool (RSP) in the following areas:

• i. Rate charged
• ii. Admission

Part c (0.75 points)

Identify three minimum requirements that a risk must meet to be eligible for transfer to one of the RSP.

Part d (0.5 points)

Briefly explain the rationale for the following rules implemented for the Ontario RSP:

• i. The pool covers only 85% of every risk transferred
• ii. The maximum total allowable transfer to the RSP is 5% of the member's voluntary private passenger non-fleet written exposures

Answer this question and see the worked solution

Concepts tested

• Risk Sharing Pool
• Facility Association
• Residual Market

More questions from this set

• CAS Exam 6C Spring 2018, Question 11
• CAS Exam 6C Spring 2018, Question 13