Exam 8 Practice Question 3
Study guide: Exam 8
An insurer has finished a personal auto GLM and is turning it into a rating plan. Determine which of the following statements about implementing and maintaining the model are true.
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I. A safe-driving discount offered for the first time, with no data on it in the model, may overlap with modelled variables, and judgmental adjustments to the plan may be appropriate.
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II. Between full rebuilds, refreshing the existing model on newer data lets its predictions reflect the most recent experience.
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III. Some ambiguity about which class a risk belongs to is acceptable in the rating plan, provided the model itself was fitted at a finer level.
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A) I only
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B) I and II only
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C) I and III only
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D) II and III only
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E) The answer is not given by (A), (B), (C), or (D)
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