View Full Version : Exam5: CGL: Graves & Castillo

04-19-2004, 06:31 AM
Page 661 of text, Starting point of loss trend is at: 12/31/85 indicating that the data is for Policy year 1985 losses.

If so, What does “Policy year Ending date: 12/31/86” mean? Policy year 1985 ends at 12/31/85 not at 12/31/86, right? Anyone cares to clarify?


Colymbosathon ecplecticos
04-19-2004, 08:45 AM
Typically, "policy year" means all of the policies issued during a year, so they cover two calendar years. Assuming uniform writings, premiums are earned on a parallelogram basis, average accident date in the middle, etc.

A policy issued on 12/31/85 will expire on 12/31/86

04-22-2004, 04:16 PM
Just to add to that.

Policy Year 1985 is all policies written in 1985, and thus
"policy year 1985"
is the same as
"policy year ending 12/31/86".

Since the last policy written in 1985 expires on 12/31/86.