Exam DISC-IA Practice Question 22
Study guide: Exam DISC-IA
For one group of policies at year end, an insurer has unearned premium of $6.0 million and $0.5 million of future installment premiums on those policies. For the remaining coverage it expects $5.6 million of losses, $0.7 million of loss adjustment expense and $0.4 million of maintenance costs. Commissions of $0.9 million were paid and expensed at issue. A separately marketed group is expected to earn a $0.3 million profit. Under SSAP No. 53, what premium deficiency reserve is required for the first group?
- A) $0
- B) $0.2 million
- C) $0.7 million
- D) $1.1 million
Answer this question and see the worked solution