CAS Exam 8 Fall 2012, Question 23
Study guide: Exam 8
The following information is available for a retrospective rating plan:
| Expected total loss | $100,000 |
|---|---|
| Maximum loss | $200,000 |
| Minimum loss | $50,000 |
| Expense and profit provision (excluding taxes) | $20,000 |
| Loss conversion factor | 1.35 |
The following is a Table M, for policies of this size:
| Entry Ratio | Charge |
|---|---|
| 0.25 | 0.85 |
| 0.50 | 0.76 |
| 0.75 | 0.69 |
| 1.00 | 0.64 |
| 1.25 | 0.59 |
| 1.50 | 0.56 |
| 1.75 | 0.52 |
| 2.00 | 0.49 |
| 2.25 | 0.46 |
| 2.50 | 0.44 |
| 2.75 | 0.42 |
| 3.00 | 0.40 |
Calculate the basic premium for this policy.
Part a (1.5 points)
Answer this question and see the worked solution