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AIDA 182 FINAL EXAM NEWEST 2026/2027 ACTUAL EXAM
COMPLETE 200 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+||SURE
PASS!!!
True or false, prospective loss costs are supplied by advisory
organizations or developed by insurers with large enough pools
of loss data. - ANSWER-True.
What describes components of an insurance rate? - ANSWER-
Amounts to pay future claims, loss adjustment expenses, other
expenses, and an amount for profit and contingencies.
An earned exposure unit is what? - ANSWER-An exposure unit
that has provided a full year of coverage, by the insurer.
The amount in rates to protect against claims or expenses being
high is what? - ANSWER-The loading for profits and
contingencies.
What is true of rate calculations? - ANSWER-Some states
require investment income to be considered explicitly in rate
calculations.
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Future acquisition costs, overhead, and premium taxes is what?
- ANSWER-The expense provision of a rate.
The amount to pay future claims and loss adjustment expenses
is what? - ANSWER-Prospective loss costs.
Investment return depends on loss reserves, the associated
unearned premium reserves, and what? - ANSWER-The types of
insurance written.
In house adjusters salaries are part of what? - ANSWER-Loss
adjustment expenses
The value being insured in a $100,000 homeowners policy is
what? - ANSWER-The exposure base.
The delay in reflecting loss experience in rates stems from
what? - ANSWER-Time period during which rates are in effect,
usually a full year.
What is a starting point to estimate future losses? - ANSWER-
Past loss experience.
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Loss estimates need to be where? - ANSWER-Shown legally
through loss reserves on their (the insurer's) balance sheet.
Insurers wait longer in ratemaking process is to do what? -
ANSWER-Permit loss data to mature.
What is true with respect to estimating losses for use in the
ratemaking process? - ANSWER-Rates are based on incomplete
loss experience because we are estimating.
The key to developing rates that are adequate to pay future
claims is what? - ANSWER-Estimating the amount of losses for
those claims.
Loss reserves. - ANSWER-Any inadequacy in the loss reserves
would make future rates inadequate and loss reserves do not
exist for year 1 because all losses have been paid.
What is true of the loss ratio method? - ANSWER-The loss ratio
method cannot be used to determine rates for a new type of
insurance.
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The loss ratio method = - ANSWER-Actual loss ratio - expected
loss ratio / expected loss ratio
Pure premium method = - ANSWER-Actual losses + loss
adjusted expenses / number of exposure units
What involves an apples-to-apples exact matching of losses,
premiums, and exposure units to a specific policy? - ANSWER-
Policy-year data collection.
True or false, when using prospective loss costs supplied by
advisory organizations, each insurer must file its own loss cost
multiplier to determine its insurance rate. - ANSWER-True.
True or false, class relativities are used to develop rates for each
rating class. - ANSWER-True.
Territorial relativities can be determined by comparing the
estimated loss ratio for each geographic territory to the
statewide what? - ANSWER-Average loss ratio.
The future development of losses can be estimated by several
actuarial methods. The most common method used applies loss
AIDA 182 FINAL EXAM NEWEST 2026/2027 ACTUAL EXAM
COMPLETE 200 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+||SURE
PASS!!!
True or false, prospective loss costs are supplied by advisory
organizations or developed by insurers with large enough pools
of loss data. - ANSWER-True.
What describes components of an insurance rate? - ANSWER-
Amounts to pay future claims, loss adjustment expenses, other
expenses, and an amount for profit and contingencies.
An earned exposure unit is what? - ANSWER-An exposure unit
that has provided a full year of coverage, by the insurer.
The amount in rates to protect against claims or expenses being
high is what? - ANSWER-The loading for profits and
contingencies.
What is true of rate calculations? - ANSWER-Some states
require investment income to be considered explicitly in rate
calculations.
,2|Page
Future acquisition costs, overhead, and premium taxes is what?
- ANSWER-The expense provision of a rate.
The amount to pay future claims and loss adjustment expenses
is what? - ANSWER-Prospective loss costs.
Investment return depends on loss reserves, the associated
unearned premium reserves, and what? - ANSWER-The types of
insurance written.
In house adjusters salaries are part of what? - ANSWER-Loss
adjustment expenses
The value being insured in a $100,000 homeowners policy is
what? - ANSWER-The exposure base.
The delay in reflecting loss experience in rates stems from
what? - ANSWER-Time period during which rates are in effect,
usually a full year.
What is a starting point to estimate future losses? - ANSWER-
Past loss experience.
,3|Page
Loss estimates need to be where? - ANSWER-Shown legally
through loss reserves on their (the insurer's) balance sheet.
Insurers wait longer in ratemaking process is to do what? -
ANSWER-Permit loss data to mature.
What is true with respect to estimating losses for use in the
ratemaking process? - ANSWER-Rates are based on incomplete
loss experience because we are estimating.
The key to developing rates that are adequate to pay future
claims is what? - ANSWER-Estimating the amount of losses for
those claims.
Loss reserves. - ANSWER-Any inadequacy in the loss reserves
would make future rates inadequate and loss reserves do not
exist for year 1 because all losses have been paid.
What is true of the loss ratio method? - ANSWER-The loss ratio
method cannot be used to determine rates for a new type of
insurance.
, 4|Page
The loss ratio method = - ANSWER-Actual loss ratio - expected
loss ratio / expected loss ratio
Pure premium method = - ANSWER-Actual losses + loss
adjusted expenses / number of exposure units
What involves an apples-to-apples exact matching of losses,
premiums, and exposure units to a specific policy? - ANSWER-
Policy-year data collection.
True or false, when using prospective loss costs supplied by
advisory organizations, each insurer must file its own loss cost
multiplier to determine its insurance rate. - ANSWER-True.
True or false, class relativities are used to develop rates for each
rating class. - ANSWER-True.
Territorial relativities can be determined by comparing the
estimated loss ratio for each geographic territory to the
statewide what? - ANSWER-Average loss ratio.
The future development of losses can be estimated by several
actuarial methods. The most common method used applies loss
