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AIDA 182 FINAL EXAM NEWEST ACTUAL EXAM
COMPLETE 200 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+||NEWEST EXAM!!!
Rate regulation is generally based on having rates that are
adequate, not unfairly discriminatory, and what? -
ANSWER-Not excessive.
What happens when sudden, large rate changes occur? -
ANSWER-Regulatory or legislative action may occur.
Primary goal of ratemaking for an insurer? - ANSWER-
Develop a rate structure that enables the insurer to
compete effectively while earning a reasonable profit.
What is true of the five ideal characteristics of rates? -
ANSWER-Some often conflict with one another and
compromises are necessary.
What is the rate multiplied by the number of exposure
units? - ANSWER-Premium.
What is the component in ratemaking to pay future claims
and loss adjustment expenses? - ANSWER-Prospective
loss costs.
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What component in ratemaking is for premium taxes and
fees paid to regulatory organizations? - ANSWER-
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? - ANSWER-Loss cost.
With regards to investment operations, what is true? -
ANSWER-Loss reserves for liability insurance are much
greater than for property insurance.
What is pure premium? - ANSWER-The amount included
in the rate per exposure unit required to pay losses.
What are expenses associated with adjust claims? -
ANSWER-Loss adjustment expenses.
A property-casualty insurer has what two operations? -
ANSWER-Insurance operations and investment
operations.
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True or false, prospective loss costs are supplied by
advisory organizations or developed by insurers with large
enough pools of loss data. - ANSWER-True.
What describes components of an insurance rate? -
ANSWER-Amounts to pay future claims, loss adjustment
expenses, other expenses, and an amount for profit and
contingencies.
An earned exposure unit is what? - ANSWER-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? - ANSWER-The loading for profits and
contingencies.
What is true of rate calculations? - ANSWER-Some states
require investment income to be considered explicitly in
rate calculations.
Future acquisition costs, overhead, and premium taxes is
what? - ANSWER-The expense provision of a rate.
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The amount to pay future claims and loss adjustment
expenses is what? - ANSWER-Prospective loss costs.
Investment return depends on loss reserves, the
associated unearned premium reserves, and what? -
ANSWER-The types of insurance written.
In house adjusters salaries are part of what? - ANSWER-
Loss adjustment expenses
The value being insured in a $100,000 homeowners policy
is what? - ANSWER-The exposure base.
The delay in reflecting loss experience in rates stems from
what? - ANSWER-Time period during which rates are in
effect, usually a full year.
What is a starting point to estimate future losses? -
ANSWER-Past loss experience.
Loss estimates need to be where? - ANSWER-Shown
legally through loss reserves on their (the insurer's)
balance sheet.
AIDA 182 FINAL EXAM NEWEST ACTUAL EXAM
COMPLETE 200 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+||NEWEST EXAM!!!
Rate regulation is generally based on having rates that are
adequate, not unfairly discriminatory, and what? -
ANSWER-Not excessive.
What happens when sudden, large rate changes occur? -
ANSWER-Regulatory or legislative action may occur.
Primary goal of ratemaking for an insurer? - ANSWER-
Develop a rate structure that enables the insurer to
compete effectively while earning a reasonable profit.
What is true of the five ideal characteristics of rates? -
ANSWER-Some often conflict with one another and
compromises are necessary.
What is the rate multiplied by the number of exposure
units? - ANSWER-Premium.
What is the component in ratemaking to pay future claims
and loss adjustment expenses? - ANSWER-Prospective
loss costs.
,2|Page
What component in ratemaking is for premium taxes and
fees paid to regulatory organizations? - ANSWER-
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? - ANSWER-Loss cost.
With regards to investment operations, what is true? -
ANSWER-Loss reserves for liability insurance are much
greater than for property insurance.
What is pure premium? - ANSWER-The amount included
in the rate per exposure unit required to pay losses.
What are expenses associated with adjust claims? -
ANSWER-Loss adjustment expenses.
A property-casualty insurer has what two operations? -
ANSWER-Insurance operations and investment
operations.
,3|Page
True or false, prospective loss costs are supplied by
advisory organizations or developed by insurers with large
enough pools of loss data. - ANSWER-True.
What describes components of an insurance rate? -
ANSWER-Amounts to pay future claims, loss adjustment
expenses, other expenses, and an amount for profit and
contingencies.
An earned exposure unit is what? - ANSWER-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? - ANSWER-The loading for profits and
contingencies.
What is true of rate calculations? - ANSWER-Some states
require investment income to be considered explicitly in
rate calculations.
Future acquisition costs, overhead, and premium taxes is
what? - ANSWER-The expense provision of a rate.
, 4|Page
The amount to pay future claims and loss adjustment
expenses is what? - ANSWER-Prospective loss costs.
Investment return depends on loss reserves, the
associated unearned premium reserves, and what? -
ANSWER-The types of insurance written.
In house adjusters salaries are part of what? - ANSWER-
Loss adjustment expenses
The value being insured in a $100,000 homeowners policy
is what? - ANSWER-The exposure base.
The delay in reflecting loss experience in rates stems from
what? - ANSWER-Time period during which rates are in
effect, usually a full year.
What is a starting point to estimate future losses? -
ANSWER-Past loss experience.
Loss estimates need to be where? - ANSWER-Shown
legally through loss reserves on their (the insurer's)
balance sheet.
