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LossLimit
08-13-2007, 05:18 AM
The Teng and Perkins paper is pretty straightforward but I'm getting hung up on these premium amounts. Can someone explain to me what basic premium is and what standard premium is?

LossLimit
08-13-2007, 01:41 PM
The Teng and Perkins paper is pretty straightforward but I'm getting hung up on these premium amounts. Can someone explain to me what basic premium is and what standard premium is?
I thought this was definitely pretty basic and I was being a dunce but I guess I'm not the only one who doesn't know....

I'm using the infinite actuary manual and although I know the exam will tell me which is which so i can plug it into the formulas I'd really like to know what I'm looking at.

LossLimit
08-15-2007, 04:15 PM
Does anyone have any suggestions as to the best way to ask Ken Fikes questions? I bought the manual thinking that I'd be able to ask questions and this was the recommended forum but I want to make sure that I'll get an answer.

hellomath
08-15-2007, 04:28 PM
Does anyone have any suggestions as to the best way to ask Ken Fikes questions? I bought the manual thinking that I'd be able to ask questions and this was the recommended forum but I want to make sure that I'll get an answer.

Just my 2 c.

This is my 2nd upper level exam, and it was (and is and will be) a struggle.

Even with a good manual/seminar, there still will be countless unclear terms and concepts. Upper level exam manuals are supposed to be a condensed version of the paper unlike manuals for lower level exams. Hence, google is your friend when stuyding.

I found http://insurance.cch.com to be useful for general insurance terms. For instance, standard premium - http://insurance.cch.com/Rupps/standard-premium.htm. Of course, you can always find a paper or two about your interested subject on CAS webpage.

BTW, different authors might have different defintions for the same term, and it is just part of life as a CAS student.

NewTubaBoy
08-15-2007, 04:43 PM
Standard Premium, in most exam circles, simply means Experience Modified Manual Premium. To put that another way, you get your manual rates, multiply them by exposure to get your Manual Premium, and then Standard Premium = Manual*Emod. You have to be careful when you use this term, however. At my work, Standard Premium means Experience Modified Manual premium including Schedule Rating, and we call the other thing "Bureau Standard"

Basic Premium is only used in Retro Rating. As far as Teng/Perkins you can think of Basic Premium as Standard Premium + bunch of other stuff. It can depend on the situation that what is included, but it can included the insurance charge, expenses etc. The actual details of what is included aren't important for this exam probably, and I'm not even sure they go into it.

You'll get a lot more info on both Standard Premium and Basic Premium on Exam 5 and then much more on Basic Premium, where you prove that retro policies (on average) are the same thing as guaranteed cost on exam 9. In doing this, you break basic premium down to other

Avi
08-16-2007, 11:31 AM
As per Tuba, the nutshell version.

For Workers Comp policies:

Manual Premium: (basically) straight application of the NCCI-approved rates for various classes/Hazard groups to the insureds exposures.

Standard Premium: Can be thought of as "experience-adjusted Manual Premium"

Basic Premium: A retrospectively-rated policy term. Simplisticly, the Up-front premium paid before the adjustment for losses. See here: http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=114711

You will see this UP CLOSE AND PERSONAL in Part 9.

LossLimit
08-17-2007, 03:55 AM
Thanks, everyone. This helps a bit. I don't want to google the terms because not every paper has the same exact definition of the term and that's why I mentioned that I was working with Teng and Perkins.

Dancescientist
03-21-2014, 02:01 AM
Found this old thread helpful. :)

VA-Mod├●┤
03-21-2014, 10:05 AM
Then let's make it a bit easier for people to find. :-)