CAS Exam 6C Spring 2019, Question 4

Study guide: Exam 6C

A pricing actuary is asked to prepare a filing for a personal automobile insurer in Ontario.

Part a (1.25 points)

The insurer's rating algorithm consists of three territories. Assuming the following data is actuarially sound, make a differential proposal that meets the requirements for approval.

Territory	On-Level Trended Earned Premiums (in $million)	One-Way Analysis Indication	Current Differentials
1	52	-6.0%	0.85
2	36	1.0%	1.00
3	23	12.0%	1.05
Total	111	0.0%

Part b (0.5 points)

Briefly describe two conditions that an insurer must meet to submit a simplified filing.

Part c (0.75 points)

The management of an insurer has asked the actuary to add the following discounts to its rating algorithm. Assuming the indication for each discount is actuarially sound, briefly explain whether it complies with Ontario regulation.

i. Retiree discount on all coverages
ii. Multi-line discount varying by property product
iii. Good credit discount

Part d (0.75 points)

Briefly describe three types of information specifically required to provide adequate support for a usage-based insurance pricing filing.

Part e (0.5 points)

Describe the acceptability of a third-party provider program offering additional services using the personal information of the insured collected by the usage-based insurance device.

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