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#1
05-05-2012, 01:36 AM
 wellmabt Member Join Date: Apr 2008 Posts: 411
2011 #9

Question on the trend period for the losses in part B.

Annual loss trend is given as 2.2%. The question is on determining the number of years of trend to get from the experience period (2010 accident year) to the renewal/forecast year ("proposed rates will be in effect for one year beginning on Oct 1, 2011").

So we want to go from the average occurrence date of the experience period to the average occurrence date of the effective period.

TIA solutions as well as sample solution on CAS website shows 2 years. i.e 7/1/10 to 7/1/12.

I agree with the 7/1/10, but why 7/1/12? How is 7/1/12 the average occurrence date of loss for a period commencing 10/1/11 and in effect for one year? Why not 10/1/12?
#2
05-05-2012, 01:54 AM
 FourKicks Member Join Date: Sep 2007 Posts: 4,470

because they're 6-month policies.
#3
05-05-2012, 02:00 AM
 wellmabt Member Join Date: Apr 2008 Posts: 411

Quote:
 Originally Posted by FourKicks because they're 6-month policies.
Doink. Thanks. Okay, should have just gone to bed.
#4
05-05-2012, 09:50 AM
 Revis Island Member CAS Join Date: Oct 2010 Posts: 983

I made this same mistake. I am going to circle these things in my exam book.
#5
05-05-2012, 12:42 PM
 Dedicated111 Member CAS AAA Join Date: Feb 2008 Studying for NOTHING! FCAS AF! Favorite beer: Fat Tire Posts: 1,249

the first thing I write down when I do these problems, on the top line of my answer sheet, is the length of the policy term.
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