CAS Exam 8 Fall 2018, Question 11
Study guide: Exam 8
Given the following information for a construction insured's general liability policy that is subject to the ISO Commercial General Liability Experience and Schedule Rating Plan:
| Company Subject Loss Cost | 270,500 |
|---|---|
| Actual Experience Ratio | 0.85 |
| Policy Effective Date | January 1, 2020 |
| Policy Term | Annual |
All major changes in the last five years for this insured:
- Upgraded all equipment in 2015
- Improved employee training in 2018
- Implemented a new safety program in 2018
Part a (0.5 points)
Calculate the experience modification for this policy.
Part b (0.75 points)
An underwriter has selected a credit of 10% for schedule rating. Assess the reasonability of this selection.
Answer this question and see the worked solution