You use the following information to calculate projected loss costs:

1. Based on historical experience, the slope of the straight line fitted to the natural log of the loss cost is 0.182.
2. The loss cost per unit exposure for the two most recent experience periods is:

   Accident Year	Loss Cost per Unit Exposure
   AY3	400
   AY4	450

3. The current experience period is weighted 90% and the prior experience period is weighted 10%.

New rates for one-year policies take effect May 1, CY5 and are in effect for one year. Calculate the projected loss cost for these new rates.

• 527
• 577
• 615
• 632
• 666

You are given the following earned premiums for three calendar years:

All policies have a one-year term and policy issues are uniformly distributed through each year.

The following rate changes have occurred:

Rates are currently at the level set on October 1, CY6.

Calculate the earned premium at the current rate level for CY6.

• 9300
• 9400
• 9500
• 9600
• 9700

You use the following information to determine a rate change using the loss ratio method.

1. Accident Year	Earned Premium at Current Rates	Incurred Losses	Weight Given to Accident Year
   AY8	4252	2260	40%
   AY9	5765	2610	60%

2. Trend Factor: 7% per annum effective
3. Loss Development Factor (to Ultimate):
   AY8: 1.08
   AY9: 1.18
4. Permissible Loss Ratio: 0.657
5. All policies are one-year policies, issued uniformly through the year, and rates will be in effect for one year.
6. Proposed Effective Date: July 1, CY10

Calculate the required portfolio-wide rate change.

• –26%
• –16%
• –8%
• –1%
• 7%

You are given:

1. Policies are written uniformly throughout the year.
2. Policies have a term of 6 months.
3. The following rate changes have occurred:

Rates are currently at the September 1, CY3 level.

Calculate the on-level factor needed to adjust CY2 earned premiums to the current rate level.

• 0.97
• 0.98
• 0.99
• 1.00
• 1.01

Company XYZ sells homeowners insurance policies. You are given:

1. The loss costs by accident year are:

   Accident Year	Loss Cost
   AY1	1300
   AY2	1150
   AY3	1550
   AY4	1800

2. The slope of the straight line fitted to the natural log of the loss costs is 0.1275.
3. AY4 experience is weighted 80% and AY3 experience is weighted 20% for rate development.

New rates take effect November 1, CY5 for one-year policies and will be in effect for one year.

Calculate the expected loss cost for these new rates.

• 2124
• 2217
• 2264
• 2381
• 2413

An insurance company uses the following information to set new rates:

1. The projected loss cost grows at an annual effective rate of 7% per year.
2. The table below shows loss cost data for two policy years, with corresponding weights:

   Policy Year	Loss Cost	Weight
   PY3	600	1 – p
   PY4	670	p

3. New rates will be effective on April 1, CY9. Policies are one-year policies and rates will be in effect for one year.

The projected expected loss cost is 951.

Calculate p.

• 0.089
• 0.119
• 0.567
• 0.881
• 0.911

An insurance company sells one-year policies that have uniformly distributed effective dates. The following rate changes have occurred:

Rates are currently at the level set on August 1, CY2. The earned premium at current rates for CY2 is 1.03 times the CY2 earned premium.

Calculate r.

• 1.7%
• 2.4%
• 3.3%
• 5.3%
• 7.5%