C14 - AUTO - FINAL LATEST
EXAM
Info Requested in Automobile Insurance Application - ANSWERS-1.
Applicant's name and primary address
2. Policy period
3. Described automobile
4. Driver info
5. Previous accidents and insurance claims
6. Convictions
7. Rating info
8. Insurance coverages applied for
9. Remarks
10. Method of payment
11. Declaration of applicant (must sign app and warrant they qualify for
driver's license, among other things)
12. Report of broker/agent
Head office underwriting - ANSWERS--Management establishes a
marketing philosophy
-Creates underwriting and rate manuals
-Operation systems to attract and classify profitable business
END OF
PAGE
1
, C14 - AUTO - FINAL LATEST
EXAM
Individual underwriting - ANSWERS--Includes risk selection and rating
to calculate premium
-Risk selection depends on:
1. personal info about applicant (moral hazard)
2. Details of the physical hazards and exposures of the risk
3. Special factors pertaining to the class of risk/type of insurance
Government and Private Insurers in Saskatchewan, BC, Manitoba -
ANSWERS--Gov responsible for auto insurance and private insurers are
available
-Gov sole underwriting for basic coverages
-Main uw function is to determine the proper rate group
-Some uw is exercised in issuing special coverage
Commonly used rating factors in automobile rating - ANSWERS--Age,
gender, marital status (prohibited in some jurisdictions)
-Driving experience (yrs licensed)
-Driving record (# accident, traffic violations)
END OF
PAGE
2
, C14 - AUTO - FINAL LATEST
EXAM
-Other regular drivers
-Territory and distance driven annually
-Vehicle usage
-Vehicle description
-Coverage
2 Components of automobile insurance rates - ANSWERS-1. Pure
premium (amount required to pay only the anticipated losses)
2. Expense loading:
-Acquisition costs (commissions)
-Processing and servicing costs (admin)
-Taxes
-Contingencies (reinsurance)
-Profits
Components of loss costs - ANSWERS--Paid losses
-Outstanding losses (provisions for claims that are reported but not yet
paid)
END OF
PAGE
3
, C14 - AUTO - FINAL LATEST
EXAM
-Incurred but not reported (IBNR) losses
Trending - ANSWERS--Use data to determine present and anticipated
future levels of costs
Current loss costs x development trend factor = projected loss costs
Vehicle Rate Groups - ANSWERS--Rate group is numerical value
assigned to a vehicle based on its expected claims costs
-In past, rate groups were calculated using manufacturers suggested
retail price
-Insurer now use the Canadian Loss Experience Automobile Rating
(CLEAR)
-CLEAR classifies cars using historical claims data, including collision,
comp, DCPD, and AB coverages
Provinces with Rate Boards - ANSWERS--Alberta
-BC
-Manitoba
-New Brunswick
END OF
PAGE
4
EXAM
Info Requested in Automobile Insurance Application - ANSWERS-1.
Applicant's name and primary address
2. Policy period
3. Described automobile
4. Driver info
5. Previous accidents and insurance claims
6. Convictions
7. Rating info
8. Insurance coverages applied for
9. Remarks
10. Method of payment
11. Declaration of applicant (must sign app and warrant they qualify for
driver's license, among other things)
12. Report of broker/agent
Head office underwriting - ANSWERS--Management establishes a
marketing philosophy
-Creates underwriting and rate manuals
-Operation systems to attract and classify profitable business
END OF
PAGE
1
, C14 - AUTO - FINAL LATEST
EXAM
Individual underwriting - ANSWERS--Includes risk selection and rating
to calculate premium
-Risk selection depends on:
1. personal info about applicant (moral hazard)
2. Details of the physical hazards and exposures of the risk
3. Special factors pertaining to the class of risk/type of insurance
Government and Private Insurers in Saskatchewan, BC, Manitoba -
ANSWERS--Gov responsible for auto insurance and private insurers are
available
-Gov sole underwriting for basic coverages
-Main uw function is to determine the proper rate group
-Some uw is exercised in issuing special coverage
Commonly used rating factors in automobile rating - ANSWERS--Age,
gender, marital status (prohibited in some jurisdictions)
-Driving experience (yrs licensed)
-Driving record (# accident, traffic violations)
END OF
PAGE
2
, C14 - AUTO - FINAL LATEST
EXAM
-Other regular drivers
-Territory and distance driven annually
-Vehicle usage
-Vehicle description
-Coverage
2 Components of automobile insurance rates - ANSWERS-1. Pure
premium (amount required to pay only the anticipated losses)
2. Expense loading:
-Acquisition costs (commissions)
-Processing and servicing costs (admin)
-Taxes
-Contingencies (reinsurance)
-Profits
Components of loss costs - ANSWERS--Paid losses
-Outstanding losses (provisions for claims that are reported but not yet
paid)
END OF
PAGE
3
, C14 - AUTO - FINAL LATEST
EXAM
-Incurred but not reported (IBNR) losses
Trending - ANSWERS--Use data to determine present and anticipated
future levels of costs
Current loss costs x development trend factor = projected loss costs
Vehicle Rate Groups - ANSWERS--Rate group is numerical value
assigned to a vehicle based on its expected claims costs
-In past, rate groups were calculated using manufacturers suggested
retail price
-Insurer now use the Canadian Loss Experience Automobile Rating
(CLEAR)
-CLEAR classifies cars using historical claims data, including collision,
comp, DCPD, and AB coverages
Provinces with Rate Boards - ANSWERS--Alberta
-BC
-Manitoba
-New Brunswick
END OF
PAGE
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