ASOPs

Question 1

First principle of P&C ratemaking

Answer 1

1. A rate is an estimate of the expected value of future costs

Question 2

Second principle of P&C ratemaking

Answer 2

2. A rate provides for all costs associated with the transfer of risk

Question 3

Third principle of P&C ratemaking

Answer 3

3. A rate provides the costs associated with an individual risk transfer

Question 4

Fourth principle of P&C ratemaking

Answer 4

4. A rate is reasonable and not excessive, inadequate, or unfairly discriminatory if it is an actuarially sound estimate of the expected value of all future costs associated with an individual risk transfer