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View Full Version : 2002 Exam 5 - interesting observation


Mel-o-rama
03-30-2004, 04:28 PM
Howdy y'all. I had to interrupt my studying to report what I just found. I wanted to ask all you other Exam 5 takers what you think.

I was going through old exams, and I came across #12 on the 2002 Exam 5. It's a question from the Moncher study note "NCCI Data Collection Calls and Statistical Plans." Is it my imagination, or does the answer to the question lie within the "History" section? And if so, why didn't anyone catch it? The question asks which of the following is true about the Policy Year Financial Calls. Answers A-C seem to be answerable in the "Financial Calls - Data Reporting" section, but answers D-E are not.

Here are those answers:

D) In the Policy Year Financial Call, the latest evaluation of each of the last eight years is reported separately, with all prior years grouped together. (Supposedly false)

E) In the Policy Year Financial Call, Allocated Loss Adjustment Expenses (ALAE) is reported separately from Loss. (Supposedly true)

In the "Financial Calls - Data Reporting" section, ALAE isn't mentioned, and neither is anything about "eight years". If however, you were to look under the History section, the bottom of page 2 to page 3 discusses the "eight year" thing, and the next paragraph discusses ALAE.

Am I missing something here? If so, please let me know.

If not, I hope the Exam Committee is exercising more diligence in making sure all questions are valid. On the same exam (2002), #41 was declared invalid since it came from the "History" section of Moncher.

Especially when one point can mean the difference between passing and failing, it's not fair to the student at all to let these mistakes happen.

Colymbosathon ecplecticos
03-30-2004, 09:55 PM
Could you offer an example of an exam where the difference between passing and failing is more than one point?

I haven't read that paper, but it is about NCCI, right? Think about how comp works. Would it make sense to combine ALAE and loss?

jets fan
03-31-2004, 09:13 AM
Mel-o-rama, I took that exam. Someone asked the same thing on the WC last year (http://www.casact.org/forum/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=9&t=000121), and as it turns out, the answer to that question is also in another section of Moncher's article:

The exhibit on page 4 in Appendix A, which is fair game for the exam, shows that for a policy year call, ALAE is reported separately from loss. It may also say that in the history section (I didn't check), but as long as the answer is in a "fair-game" page of the article, I don't see a case for appeal.

Could you offer an example of an exam where the difference between passing and failing is more than one point?

Yes. A passing score will be somewhere in the neighborhood of 55-60%. A failing score could be 0% (just don't write anything). The difference would then be 50-60 points, which is more than 1 point.

If you're really asking can it be 1 point or less, the answer is yes - it happened to me on Part 9. On any exam, there will always be people on the border.

Think about how comp works. Would it make sense to combine ALAE and loss?

I don't follow you here. What is it about "how comp works" that makes you think that it's common sense that they should be separated? Loss and expense are combined in a lot of areas of comp (Schedule P, rate filings, most internal profitability documents at my company, etc.) - it has a relatively low loss expense ratio.

Mel-o-rama
03-31-2004, 11:02 AM
jet's fan: Thanks for pointing that out. I see that ultimately any arguments would lead to the conclusion that this was a "valid" question, since you can answer D and E from page 4 of Appendix A. But I'd still like to point out a few things.

#1) Appendix A is hardly readable.

#2) The use of the words "last eight years" makes me think that they actually did pull D and E from the History section. They did it in question #41, and I think they did it here. However, the fact that the same answers lie in Appendix A probably saved their butts.

#3) They shouldn't be asking too many questions about obscure footnotes and nitpicky details on exhibits in appendices. Such questions don't test actual knowledge. But that's another topic altogether.

This year I'm really concerned about non-syllabus material popping up on the exam, since they've changed so much. For example, the only HO form we need to know now is the HO-3 form. Are they going to ask any HO-1, HO-2, HO-4, HO-6, HO-8 questions?

Last year I failed Exam 5 by less than a point. That sucks, and I don't want to do it again. Last year I was going for 60 points. I guess this year I'll have to go for 70.

Wigmeister General
03-31-2004, 11:31 AM
Howdy y'all. I had to interrupt my studying to report what I just found. I wanted to ask all you other Exam 5 takers what you think.

I was going through old exams, and I came across #12 on the 2002 Exam 5. It's a question from the Moncher study note "NCCI Data Collection Calls and Statistical Plans." Is it my imagination, or does the answer to the question lie within the "History" section? And if so, why didn't anyone catch it? The question asks which of the following is true about the Policy Year Financial Calls. Answers A-C seem to be answerable in the "Financial Calls - Data Reporting" section, but answers D-E are not.

Here are those answers:

D) In the Policy Year Financial Call, the latest evaluation of each of the last eight years is reported separately, with all prior years grouped together. (Supposedly false)

E) In the Policy Year Financial Call, Allocated Loss Adjustment Expenses (ALAE) is reported separately from Loss. (Supposedly true)

In the "Financial Calls - Data Reporting" section, ALAE isn't mentioned, and neither is anything about "eight years". If however, you were to look under the History section, the bottom of page 2 to page 3 discusses the "eight year" thing, and the next paragraph discusses ALAE.

Am I missing something here? If so, please let me know.

If not, I hope the Exam Committee is exercising more diligence in making sure all questions are valid. On the same exam (2002), #41 was declared invalid since it came from the "History" section of Moncher.

Especially when one point can mean the difference between passing and failing, it's not fair to the student at all to let these mistakes happen.


:rofl: :rofl: :rofl:

Wigmeister General
03-31-2004, 11:34 AM
jet's fan: Thanks for pointing that out. I see that ultimately any arguments would lead to the conclusion that this was a "valid" question, since you can answer D and E from page 4 of Appendix A. But I'd still like to point out a few things.

#1) Appendix A is hardly readable.

#2) The use of the words "last eight years" makes me think that they actually did pull D and E from the History section. They did it in question #41, and I think they did it here. However, the fact that the same answers lie in Appendix A probably saved their butts.
#3) They shouldn't be asking too many questions about obscure footnotes and nitpicky details on exhibits in appendices. Such questions don't test actual knowledge. But that's another topic altogether.

This year I'm really concerned about non-syllabus material popping up on the exam, since they've changed so much. For example, the only HO form we need to know now is the HO-3 form. Are they going to ask any HO-1, HO-2, HO-4, HO-6, HO-8 questions?

Last year I failed Exam 5 by less than a point. That sucks, and I don't want to do it again. Last year I was going for 60 points. I guess this year I'll have to go for 70.


Not relevant

Wouldn't be the first time this happened.

But they always ask nitpicky questions from footnotes.

jets fan
03-31-2004, 11:45 AM
#1) Appendix A is hardly readable.

Yes, that's true. And that makes it the perfect evil thing to put on the exam.

#2) The use of the words "last eight years" makes me think that they actually did pull D and E from the History section. They did it in question #41, and I think they did it here. However, the fact that the same answers lie in Appendix A probably saved their butts.

There was more discussion on #41 on the WC: (http://www.casact.org/forum/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=9&t=000109)

For #41 part a), I agree that it tests material that is not on the syllabus. For part b), they have an out - look on the very first page of Moncher's article before the history section starts. Under "Detailed Claim Information (DCI) Data" it says "used for special analyses and research." I don't think this was their intent when they put the question on the exam - I believe they were wrongfully intending to ask a question based on the line in the history section saying "DCI has been used in such areas as measuring the cost of system reforms, updating the Standard Wage Distribution Tables, and creating a medical cost index specific to workers compensation medical costs". But as it turns out, by luck, they have a sentence they can point to which will cure the problem for part b). Part a), however, is clearly NOT on the syllabus.

Also, check #14. They corrected the version of the test that's available on line on the CAS website (notice the text distortion in the question). But on the actual version that was handed out to candidates on that test day, they had the wrong total number of claims (I forget the number given, but it wasn't 3,000).

And there was another faulty/ambiguous question - #30. They admit this in the on-line written solutions to that question. In the 100,00 limit column, either the 30,000 has to be wrong, or the 15,000 has to be wrong. They both can't be correct.

#3) They shouldn't be asking too many questions about obscure footnotes and nitpicky details on exhibits in appendices. Such questions don't test actual knowledge. But that's another topic altogether.

Like you say, this is another topic. And part of it comes down to what 1 person thinks is relevant versus what someone else thinks is relevant. And I think we agree that it wasn't the committee's intent to ask about that appendix - their intent was probably to ask about the History Section, which isn't/wasn't on the Syllabus.

Colymbosathon ecplecticos
03-31-2004, 02:04 PM
Jets Fan wrote:I don't follow you here. What is it about "how comp works" that makes you think that it's common sense that they should be separated? Loss and expense are combined in a lot of areas of comp (Schedule P, rate filings, most internal profitability documents at my company, etc.) - it has a relatively low loss expense ratio.

You are correct, JF. I was not thinking clearly when I wrote that.