IC47A-1 CASUALTY ACTUARIAL SCIENCE PART 1 - 04

Que. 1 : Q1) Which triangle contains the history of paid losses and small variations in paid loss as of 12 months can be seen to be indicative of very large differences in ultimate accident year losses?

   1.  a) Incremental Paid Losses

   2.  b) Incremental Incurred Losses

   3.  c) Cumulative Paid Losses

   4.  d) Paid Loss as a Percent of Incurred Loss

Que. 2 : Q2) If other companies, are reflecting the negative factor in their rating plans, the result will be a tendency towards insuring risks possessing the negative characteristic, a situation known as ________.

   1.  a) Adverse Selection

   2.  b) Skimming the cream

   3.  

   4.  

Que. 3 : Q3) Which of the following methods of loss reserve estimation methods estimates ultimate loss by adding together actual reported loss with expected future incurred development?

   1.  a) Bornhuelter —- Ferguson method

   2.  b) Average claim paid projection method

   3.  c) Average incurred claim projection method.

   4.  

Que. 4 : Q4) Which method develops indicated rate changes rather than indicated rates and indicates rates are determined by application of an adjustment factor, the ratio of the experience loss ration to a target loss ratio, to the current rate?

   1.  a) Individual Rating Method

   2.  b) Experience Rating Method

   3.  c) Loss Ratio Method

   4.  d) Pure Premium Method

Que. 5 : Q5) The third actuarial criterion, alluded to above is ______________ and a rating group should be large enough to measure costs with sufficient accuracy.

   1.  a) Homogeneity

   2.  b) Accuracy

   3.  c) Credibility

   4.  d) Reliability