SOA Exam FAM Sample Question 99
Study guide: Exam FAM
Company XYZ sells dental insurance policies. You are given:
(i) All policies have a one-year term.
(ii) Policy effective dates are uniformly distributed.
(iii) The earned premium for Calendar Year 3 is 600.
The following rate changes have occurred:
| Date | Rate change |
|---|---|
| September 1, CY1 | 3.0% |
| May 15, CY3 | 2.0% |
| August 1, CY4 | 5.0% |
Rates are currently at the level set on August 1, CY4.
Calculate the earned premium at current rates for CY3.
- A) 610
- B) 617
- C) 632
- D) 640
- E) 659
Answer this question and see the worked solution