IC47A-1 CASUALTY ACTUARIAL SCIENCE PART 1 - 05
| Q1.The formula for the pure premium is |
| a) S = L + E |
| b) S = L - E |
| c) S = L / E |
| d) S = L * E |
| Q2.Which of the following statements is incorrect? |
| a) Incurred Losses = Paid Losses + Ending claim liability. |
| b) Assets = Liability + Owners' Equity |
| c) Income = Revenue - Expenses |
| d) Owner's Equity = Contributed Capital + Retained Earnings |
| Q3.Once an insurer has satisfied its obligation to the policyholder the company may pursue recoveries from third parties for some part of the indemnity amount paid to the policyholder. This right of recovery is called: |
| a) Subrogation |
| b) Loss development |
| c) Salvage |
| Q4.Which method is based upon the assumption that claims move from unreported to reported-and -unpaid to paid in a pattern that is sufficiently consistent that past experience can be used to predict future development? |
| a) Parallelogram method |
| b) Pure premium method |
| c) Loss ratio method |
| d) Loss Development method |
| Q5.Which is the most important consideration is that the rating variables have an objective definition and there should be little ambiguity, class definitions should be mutually exclusive and exhaustive and the opportunity for administrative error should be minimized? |
| a) Actuarial criteria |
| b) Social criteria |
| c) Operational criteria |
| d) None of these |
| Q6.Which area focuses on utility theory and game theory, which apply to individuals, families, and entities retaining and sharing risk, as well as to insurers? |
| a) Statistical area |
| b) Financial area |
| Q 7. Actuarial Science has borrowed its procedure from a variety of other sciences listed below:- Which of the above, if any, is incorrect? |
| a) Economics |
| b) Psychology |
| c) Finance |
| d) Statistics |
| Q 8. A portion of the profit and contingencies provision represents a provision for adverse deviation or a ___. |
| a) Risk loading |
| b) Risk theory |
| c) Risk design |
| d) Rate making |
| Q9.Which loss is any legally enforceable obligation and within the context of insurance, the obligation to pay a monetary award for injury or damage caused by one's negligent or statutorily prohibited action? |
| a) Property loss |
| b) Net income loss |
| c) Personnel loss |
| d) Legal liability loss |
| Q10.The reserve for ___ represents the amount that will be required for future payments of claims that have already been reported to the insurer. |
| a) Known claims |
| b) Unknown claims |