ISO Exper Rating

[3tac]

I am having trouble understanding how to select the PAFs.

In Q27-2001 (All10 p 129), we have to select PAF1 and PAF2. Based on the info given, I selected:
PAF1:
Latest Yr = 1.05
2nd Latest = 1.06
3rd Latest = 1.12

PAF2:
Latest Yr = 0.91
2nd Latest = 0.88
3rd Latest = 0.80

My logic here was that the Latest year = 1998 which is 4 yrs from the policy being rated (2002), the 2nd latest = 1999 which is 3 yrs from the policy being rated, etc.

The solution however shows we should use PAF1 = 1.03 and PAF2 = 0.94 for ALL yrs, which are the PAFs for a fully mature C-M policy.

This has got to be something basic I am missing here. If all my experience is C-M, then how do I know when to start counting?

[Pack Fan]

PAF's from Table 1 apply when the policy being rated is a claims-made policy - the same factor applies for each year based on the YIP of the policy being rated.

PAF's from Table 2 apply only when a particular policy of the experience period is a claims-made policy. This factor is based on the YIP of the policy in the experience period.

In the above referenced problem, the policy being rated is a mature C-M, since the insured has had C-M since 1992. (1992 1st YIP, 1993, 2nd YIP, 1994, 3rd YIP, etc.) All the policies in the experience period are also mature C-M.