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AIDA 182 FINAL EXAM WITH ACTUAL CORRECT QUESTIONS AND VERIFIED DETAILED ANSWERS |FREQUENTLY TESTED QUESTIONS AND SOLUTIONS|ALREADY GRADED A+|NEWEST|GUARANTEED PASS|LATEST UPDATE$20.49
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AIDA 182 FINAL EXAM WITH ACTUAL CORRECT QUESTIONS AND VERIFIED DETAILED ANSWERS |FREQUENTLY TESTED QUESTIONS AND SOLUTIONS|ALREADY GRADED A+|NEWEST|GUARANTEED PASS|LATEST UPDATE
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Course
AIDA 182
Institution
AIDA 182
AIDA 182 FINAL EXAM WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS|ALREADY GRADED
A+|NEWEST|GUARANTEED PASS|LATEST
UPDATE
AIDA 182 FINAL EXAM 2024-2025 WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS|ALREADY GRADED
A+|NEWEST|GUARANTEED PASS|LATEST
UPDATE
What is the rate multiplied by the number of exposure units?
Premium.
What is the component in ratemaking to pay future claims and loss adjustment expenses?
Prospective loss costs.
What component in ratemaking is for premium taxes and fees paid to regulatory organizations?
Expense provision.
The pure premium is the amount included in the rate per exposure unit required to pay losses. This
component is also called what?
Loss cost.
With regards to investment operations, what is true?
Loss reserves for liability insurance are much greater than for property insurance.
What is pure premium?
The amount included in the rate per exposure unit required to pay losses.
What are expenses associated with adjust claims?
Loss adjustment expenses.
A property-casualty insurer has what two operations?
Insurance operations and investment operations.
1|Page
,True or false, prospective loss costs are supplied by advisory organizations or developed by insurers with
large enough pools of loss data.
True.
What describes components of an insurance rate?
Amounts to pay future claims, loss adjustment expenses, other expenses, and an amount for profit and
contingencies.
An earned exposure unit is what?
An exposure unit that has provided a full year of coverage, by the insurer.
The amount in rates to protect against claims or expenses being high is what?
The loading for profits and contingencies.
What is true of rate calculations?
Some states require investment income to be considered explicitly in rate calculations.
Future acquisition costs, overhead, and premium taxes is what?
The expense provision of a rate.
The amount to pay future claims and loss adjustment expenses is what?
Prospective loss costs.
Investment return depends on loss reserves, the associated unearned premium reserves, and what?
The types of insurance written.
In house adjusters salaries are part of what?
Loss adjustment expenses
The value being insured in a $100,000 homeowners policy is what?
The exposure base.
The delay in reflecting loss experience in rates stems from what?
Time period during which rates are in effect, usually a full year.
What is a starting point to estimate future losses?
Past loss experience.
Loss estimates need to be where?
Shown legally through loss reserves on their (the insurer's) balance sheet.
Insurers wait longer in ratemaking process is to do what?
2|Page
, Permit loss data to mature.
What is true with respect to estimating losses for use in the ratemaking process?
Rates are based on incomplete loss experience because we are estimating.
The key to developing rates that are adequate to pay future claims is what?
Estimating the amount of losses for those claims.
Loss reserves.
Any inadequacy in the loss reserves would make future rates inadequate and loss reserves do not exist
for year 1 because all losses have been paid.
What is true of the loss ratio method?
The loss ratio method cannot be used to determine rates for a new type of insurance.
The loss ratio method =
Actual loss ratio - expected loss ratio / expected loss ratio
Pure premium method =
Actual losses + loss adjusted expenses / number of exposure units
What involves an apples-to-apples exact matching of losses, premiums, and exposure units to a specific
policy?
Policy-year data collection.
True or false, when using prospective loss costs supplied by advisory organizations, each insurer must
file its own loss cost multiplier to determine its insurance rate.
True.
True or false, class relativities are used to develop rates for each rating class.
True.
Territorial relativities can be determined by comparing the estimated loss ratio for each geographic
territory to the statewide what?
Average loss ratio.
The future development of losses can be estimated by several actuarial methods. The most common
method used applies loss development factors to the what?
Current experience.
What is correct with respect to the policy-year ratemaking data collection method?
It is the only method that links losses, premiums, and exposure units to a specific policy.
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