2010 #2 - Ideally Insurable Loss Exposure

[mindyherzog]

WTF (to put it kindly) does the answer (model answer given by CAS) for this question mean?

Here's the full question and model response.

QUESTION
a. Briefly explain three characteristics of an ideally insurable loss exposure.
b. For each characteristic identified in part a. above, briefly explain whether personal auto exposure meets the characteristic.

MODEL ANSWER
a. 1. Definite and immeasurable-losscan be deferred as to location of loss, cause of loss, and time of loss. Loss amount that is immeasurable and quantifiable. This can aid frequency and severity projection for rate "illegible".
2. One of the large numbers of similar exposure units. Loss expenses need to be one of the many similar loss exposures insured so that they can be probed.
3. Independent and not catastrophic loss exposure need to be independent from each other for reduced risk in pooling and do not create catastrophic loss to insurers.


b. 1. Auto accidents can be defined as to where, how and time of the accident. Loss amount can be quantified by loss "illegible" for property loss land quantified by medical professional or others for medical and funeral expenses.
2. Auto expenses are in large number of similar exposures risk that can be pooled. Auto exposures are large in quantity and defer from one another in territories, age, sex, mental status and age of car model.
3. Auto exposures are independent from one another. One person having an accident will not affect loss frequency or severity of another loss exposures. Also, losses from auto accidents such as bodily injury and property damage will not be catastrophic to insurers.

lol. it's hard to make sense of those answers... "Definite and immeasurable"? "so they can be probed"? And what is rate "illegible"?

I had issues with question 6 part A as well. I'm not sure what Medical "illegible" to others means.

[mindyherzog]

yay, finally a response!

hahaha. I think I figured out "illegible" - I think this means the CAS could not figure out what the person wrote, i.e. what they wrote was illegible! Can you believe they gave this person full credit!!!! You'll see a bunch more like that for the answers for this exam :-~

Also, I found this same question at the beginning of the 2008 exam, pure luck as I was printing out the old exams.

[Vorian Atreides]

Candidate may not have received full credit (see sig). However, what it does indicate that if you're close enough that a grader could reasonably decipher (ineligible was most likely what was meant by "illegible").

Note that the likely response for "immeasurable" was to be just measurable.

And the solutions CAS provides might be better thought of as "Sample Solutions" rather than model answers that are 100% correct (again, see sig.)

[mindyherzog]

Hey Vorian,

What's "sig"? On the first page of the solutions to this exam (2010 exam 5), it says "Attached are example responses that received full credit. In many cases, other answers not listed received full credit".

Several of the solutions have the "illegible" sprinkled throughout (quotes included): #2, 6, & 16. It does not make sense to mean "ineligible" (or any other one word) as I only figured out a couple days later.

[Vorian Atreides]

Originally Posted by mindyherzog

Hey Vorian,

1. What's "sig"?

2. On the first page of the solutions to this exam (2010 exam 5), it says "Attached are example responses that received full credit. In many cases, other answers not listed received full credit".

3. Several of the solutions have the "illegible" sprinkled throughout (quotes included): #2, 6, & 16. It does not make sense to mean "ineligible" (or any other one word) as I only figured out a couple days later.

1. "sig" == Signature line; things that appear at the bottom of every post one makes; change the sig and all of posts of that person/alt will change.

2. Haven't noticed that before; my quote comes from the syllabus itself(can provide link if desired). However, receiving full credit isn't indicative of having a "perfect" answer. I would say that the provided solutions help indicate at what level of response one should at least prepare for.

3. I agree that the translation of "illegible" to "ineligible" isn't to be done on every problem. Rather, one should look to see what the proper answer would be based on the syllabus material, and then look to reconcile taking misspelling (including multi-word errors) into account. Someone on the grading team apparently was able to make a connection that appeared appropriate.

[crabber]

Ha! The other student at my company took this exam in the spring and received zero credit for this question. She answered the question as if they had asked "characteristics of an ideal exposure base". Both myself and an experienced underwriter looked at the wording of the question and agreed with her interpretation of the question (she's a non-native english speaker and always second guesses her understanding of english). I encouraged her to appeal the question since she had received a 5, but she looked at the syllabus and the wording (however poor) was taken directly from the paper, so she did not appeal. When the sample solutions came out both myself and the underwriter looked at the answers that received full credit and about fell over laughing.

Originally Posted by crabber

Ha! The other student at my company took this exam in the spring and received zero credit for this question. She answered the question as if they had asked "characteristics of an ideal exposure base". Both myself and an experienced underwriter looked at the wording of the question and agreed with her interpretation of the question (she's a non-native english speaker and always second guesses her understanding of english). I encouraged her to appeal the question since she had received a 5, but she looked at the syllabus and the wording (however poor) was taken directly from the paper, so she did not appeal. When the sample solutions came out both myself and the underwriter looked at the answers that received full credit and about fell over laughing.

It is pretty funny when you actually read it. I almost prefer canned answers than actual answers here since it better conveys what graders wanted to see not an approximation that is good enough to indicate the candidate "got it." Also, going back to the syllabus is great if you are already very familiar with the material but if you are using old exams as a diagnostic of how well you know something or you are still learning, it's much more annoying to try to figure out what these are "supposed" to mean.

That being said, the CAS doesn't have infinite resources and they probably had good reasons for doing it this way.

[mindyherzog]

Vorian: Yes, I know these answers are not necessarily correct, but they did get full credit. I was saying I was surprised they got full credit.

tbernste: I agree with you on your first paragraph. However, they better have 'canned answers' as part of their grading criteria, so I don't agree with you there.

crabber: That's funny, I also interpreted the question to be asking for qualities of an ideal exposure base. Again, wtf are they thinking, not giving any credit to someone who answered it that way, and yet giving this person with the 'model' answer full credit (it still doesn't make any sense no matter how many times I read it - someone has yet to create a post that deciphers it.).

M.

[crabber]

I just re-read the sample solutions and