Term Test 1_solutions

0 2 15 policieswritten ofpolicieswritten date written

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Unformatted text preview: A company has the following rating structure: • Policy premium = Base Rate x Territory Factor + Policy Fee • Base Rate = $1,000 • Policy Fee = $50 • Territory Factors: Territory Factor 1 1.0 2 1.5 • Policies written: # of Policies Written Date Written Territory 1 Territory 2 Jan 1, 2012 10 15 Jul 1, 2012 12 12 • On April 1, the Base Rate is changed to $1,100 a) Calculate the 2012 Earned Premium for this company. b) Calculate the 2012 on‐level factor that can be used for rate making. Solution: Picture not necessary but will find it helpful to draw it. 2012 Jan 1 July 1 2013 Only 50% of policies written on July 1 are EARNED by end of year Base rate increased April 1, 2012 to $...
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This note was uploaded on 04/14/2012 for the course ACTSC 462 taught by Professor Wslennox during the Spring '11 term at Waterloo.

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