AS462_Lec09 - ACTSC 462/862 P&C Insurance Ratemaking...

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1 ACTSC 462/862 Lecture 9
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2 Basic Ratemaking Chapter 13: Other Considerations
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3 Basic Ratemaking – Chapter 13 > Chapter covers: •Th is chapter explores other considerations company management should make, along with the cost based rate indications, to determine what rates to charge in practice. –Regu latory constraints
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4 Basic Ratemaking – Chapter 13 > Regulatory Constraints •The property/casualty insurance industry is highly regulated, and for the most part, the regulation is executed by the individual provinces both through provincial law and provincial regulatory agencies • insurance rate regulation generally requires that insurers file proposed manual rates with the appropriate regulatory body Æ filing requirements vary considerably by jurisdiction and product
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5 Basic Ratemaking – Chapter 13 >Examp les of Regulatory Constraints: • insurance regulation may preclude the use of certain actuarially indicated rates or rate differentials – limit the amount of an insurer’s rate change –regu la to ry authority may require a company to provide written notice to all insureds or hold a public hearing in the event a proposed rate change exceeds some specified threshold •Som e regulations prohibit the use of particular characteristics for rating, even though the characteristics may be
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6 Basic Ratemaking – Chapter 13 >Examp les of Regulatory Constraints: • Regardless of the company’s rate indications, a company must charge rates that comply with the applicable state regulations •Act ions companies can take:
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AS462_Lec09 - ACTSC 462/862 P&C Insurance Ratemaking...

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