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{"sheet":"Instructions","index":0,"n_rows":32,"n_cols":1,"rows_kept":32,"cut":false,"hidden":false,"merged":[]}
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[]
[]
[]
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["Instructions"]
[]
["1.) Find a quiet place and allow yourself the full four hour exam period to practice. Treat this just as you would the real exam."]
[]
["2.) Use the Navigator worksheet to see a brief description of each question, its point value and navigate between questions in your preferred order."]
[]
["3.) Answer each question either to the side or below the grey question area."]
[]
["4.) Use cell B1 on each question worksheet to mark whether you finished the question or not. You should use this feature to"]
["       reflect your confidence in your answer. This way you'll know if you're on the money or your guesses were lucky."]
[]
["5.) Grade each question harshly. It's better to put in extra reviewing time now than find the examiners aren't as generous as you hoped."]
["       Use increments of 0.25 when scoring; pay attention to the language used in the question and the point value. An \"identify\" question"]
["       is likely 0.25 per item while an \"explain\" or \"briefly justify\" gets 0.25 for the item and another 0.25 for the justification."]
[]
["6.) Enter your estimated score for each sub-part of a question in the box beneath the sub-part point value. They look like:"]
[]
["7.) Use the Point Grid to see your score and a breakdown of where you scored well and where you didn't."]
[]
["8.) Find the top five questions where you lost the most points. These are the topics you need to review the most intensely in the"]
["      next day or so."]
[]
["9.) On the BattleActs site → Custom Battles → BattleCards - Prior Exams → Select this exam and mark the cards you got right and wrong."]
["      This allows your Battle Readiness Quotient (BRQ) to track your strengths and weaknesses."]
[]
["10.) Use the Reset Exam button on the Point Grid worksheet to clear all of your work ready for a new attempt at this exam later."]
["slay the beast"]

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["FORMULA SHEET"]
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["• For the negative binomial distribution (for use on question 3):"]
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[null,"○"]
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[]
[null,"○"]
[]
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["• For the shifted Pareto distribution (for use on questions 7, 13 & 15):"]
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[null,"○"]
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[]
[null,"○"]
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[null,"○"]
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[]
[null,"○"]

{"sheet":"Point Grid","index":2,"n_rows":32,"n_cols":19,"rows_kept":32,"cut":false,"hidden":false,"merged":[[5,1,6,1]]}
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[]
[]
[]
["2016 Exam 8"]
[null,"Total Point Value","Sub-Part of Question",null,null,null,null,null,null,null,null,"Your Score","Sub-Part of Question"]
["Question",null,"(a)","(b)","(c)","(d)","(e)","(f)","(g)","Status",null,"Question","(a)","(b)","(c)","(d)","(e)","(f)","(g)"]
[1,{"$f":"SUM(C8:I8)","v":2.75},2.75,null,null,null,null,null,null,{"$f":"INDIRECT(\"'\"&A8&\"'!B1\")","v":"Incomplete"},null,{"$f":"A8","v":1},{"$f":"_xlfn.IFNA(IF(ISBLANK(INDEX(INDIRECT(\"'\"&$L8&\"'!$A:$A\"),MATCH(M$7,INDIRECT(\"'\"&$L8&\"'!$A:$A\"),0)+2)),\"\",INDEX(INDIRECT(\"'\"&$L8&\"'!$A:$A\"),MATCH(M$7,INDIRECT(\"'\"&$L8&\"'!$A:$A\"),0)+2)),\"\")","v":""},"","","","","",""]
[2,{"$f":"SUM(C9:I9)","v":2},0.5,0.5,1,null,null,null,null,{"$f":"INDIRECT(\"'\"&A9&\"'!B1\")","v":"Incomplete"},null,{"$f":"A9","v":2},"","","","","","",""]
[3,2,1,1,null,null,null,null,null,"Incomplete",null,3,"","","","","","",""]
[4,3,1.5,1,0.5,null,null,null,null,"Incomplete",null,4,"","","","","","",""]
[5,2.25,1.75,0.5,null,null,null,null,null,"Incomplete",null,5,"","","","","","",""]
[6,2.5,0.75,0.75,1,null,null,null,null,"Incomplete",null,6,"","","","","","",""]
[7,1.5,1,0.25,0.25,null,null,null,null,"Incomplete",null,7,"","","","","","",""]
[8,2.75,1.25,1.5,null,null,null,null,null,"Incomplete",null,8,"","","","","","",""]
[9,1.5,0.5,0.5,0.5,null,null,null,null,"Incomplete",null,9,"","","","","","",""]
[10,2.5,2.5,null,null,null,null,null,null,"Incomplete",null,10,"","","","","","",""]
[11,3.75,3,0.75,null,null,null,null,null,"Incomplete",null,11,{"$f":"_xlfn.IFNA(IF(ISBLANK(INDEX(INDIRECT(\"'\"&$L18&\"'!$A:$A\"),MATCH(M$7,INDIRECT(\"'\"&$L18&\"'!$A:$A\"),0)+2)),\"\",INDEX(INDIRECT(\"'\"&$L18&\"'!$A:$A\"),MATCH(M$7,INDIRECT(\"'\"&$L18&\"'!$A:$A\"),0)+2)),\"\")","v":""},"","","","","",""]
[12,2.5,1.5,0.25,0.75,null,null,null,null,"Incomplete",null,12,"","","","","","",""]
[13,2.5,1.25,1.25,null,null,null,null,null,"Incomplete",null,13,"","","","","","",""]
[14,1.75,0.5,0.5,0.75,null,null,null,null,"Incomplete",null,14,"","","","","","",""]
[15,1.75,1.25,0.5,null,null,null,null,null,"Incomplete",null,15,"","","","","","",""]
[16,3.75,2.75,1,null,null,null,null,null,"Incomplete",null,16,"","","","","","",""]
[17,2.5,1,1,0.5,null,null,null,null,"Incomplete",null,17,"","","","","","",""]
[18,{"$f":"SUM(C25:I25)","v":2},1,1,null,null,null,null,null,"Incomplete",null,{"$f":"A25","v":18},"","","","","","",""]
[19,3,3,null,null,null,null,null,null,"Incomplete",null,19,"","","","","","",""]
[20,3,0.75,2.25,null,null,null,null,null,"Incomplete",null,20,"","","","","","",""]
[21,4,4,null,null,null,null,null,null,"Incomplete",null,21,"","","","","","",""]
[]
["Total",{"$f":"SUM(B8:B28)","v":53.25},null,null,null,null,null,null,null,null,null,"TOTAL",{"$f":"IF(SUM(IF(M8:S28=\"\",0,1))=0,\"\",SUM(M8:S28))","v":""},null,"Percentage:",{"$f":"IF(M30=\"\",\"\",M30/B30)","v":""}]
[]
[null,null,null,null,null,null,null,null,null,null,null,"Passing Score:",37.25]

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[]
[]
[]
[]
[]
["Navigator – Select a question to go to it"]
[]
["Question #",null,null,null,null,null,null,"Status"]
["Q1 -- Bailey & Simon -- Individual Risk Variation -- 2.75 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J8","v":"Incomplete"}]
["Q2 -- Robertson -- Clustering Theory -- 2.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J9","v":"Incomplete"}]
["Q3 -- ASOP 12 -- Application -- 2.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J10","v":"Incomplete"}]
["Q4 -- Goldburd (GLM) -- Model Selection -- 3.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J11","v":"Incomplete"}]
["Q5 -- Goldburd (GLM) -- Lorenz Curves & Gini Coefficients -- 2.25 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J12","v":"Incomplete"}]
["Q6 -- Goldburd (GLM) -- Renewal Models --2.50 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J13","v":"Incomplete"}]
["Q7 -- Goldburd (GLM) -- AIC & BIC -- 1.50 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J14","v":"Incomplete"}]
["Q8 -- Bahnemann -- Adverse Selection in ILFs -- 2.75 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J15","v":"Incomplete"}]
["Q9 -- Fisher -- Experience Modifications -- 1.50 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J16","v":"Incomplete"}]
["Q10 -- NCCI 1 -- Experience Modification -- 2.50 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J17","v":"Incomplete"}]
["Q11 -- Fisher -- Quintiles & Efficiency Tests -- 3.75 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J18","v":"Incomplete"}]
["Q12 -- Fisher -- Table M -- 2.50 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J19","v":"Incomplete"}]
["Q13 -- Fisher -- Converted Insurance Charge -- 2.50 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J20","v":"Incomplete"}]
["Q14 -- Fisher -- Per-Occurrence and Aggregate Overlap -- 1.75 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J21","v":"Incomplete"}]
["Q15 -- Fisher -- Large Dollar Deductible Rating -- 1.75 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J22","v":"Incomplete"}]
["Q16 -- Fisher -- Large Dollar Deductible Rating -- 3.75 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J23","v":"Incomplete"}]
["Q17 -- Couret & Venter -- Multi-Dimensional Credibility -- 2.50 points ",null,null,null,null,null,null,{"$f":"'Point Grid'!J24","v":"Incomplete"}]
["Q18 -- Grossi -- Epistemic & Aleatory Risk -- 2.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J25","v":"Incomplete"}]
["Q19 -- Clark -- Reinsurance & Return on Capital -- 3.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J26","v":"Incomplete"}]
["Q20 -- Grossi -- Reinstatement Premiums -- 3.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J27","v":"Incomplete"}]
["Q21 -- Bernegger -- Expected Ceded Loss Ratio -- 4.00 points",null,null,null,null,null,null,{"$f":"'Point Grid'!J28","v":"Incomplete"}]

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[1,"Incomplete",null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","A group of insureds have different expected claim frequencies. The number of insureds claim-free"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('1'!A1,'Point Grid'!A:A,0))","v":2.75},"for the past t years is as follows:"]
[]
[null,"Expected Claim Frequency"]
[null,null,"t = 0","t = 1","t = 2","t = 3"]
[null,0.05,50000,47500,45000,44000]
[null,0.1,50000,45000,43000,36000]
[null,0.2,25000,20500,16500,14000]
[null,"Total",{"$f":"SUM(C8:C10)","v":125000},{"$f":"SUM(D8:D10)","v":113000},{"$f":"SUM(E8:E10)","v":104500},{"$f":"SUM(F8:F10)","v":94000}]
[]
["(a)","Determine whether the variation of an individual insured's chance for an accident changes over time."]
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[2,"Incomplete",null,null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('2'!A1,'Point Grid'!A:A,0))","v":2}]
["(a)","Describe the purpose of clustering as it pertains to risk classification."]
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[]
[]
["(b)","Briefly contrast hierarchical and non-hierarchical clustering methods."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A9,'Point Grid'!$C$7:$I$7,0))","v":0.5}]
[]
[]
["(c)","An insurer wants to increase the number of groupings for a particular class within their classification plan."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A13,'Point Grid'!$C$7:$I$7,0))","v":1},"According to Actuarial Standards of Practice No. 12, \"Risk Classification\", describe two considerations in"]
[null,"using hierarchical or non-hierarchical clustering methods to determine the groupings."]

{"sheet":"3","index":6,"n_rows":18,"n_cols":8,"rows_kept":18,"cut":false,"hidden":false,"merged":[]}
[3,"Incomplete",null,null,null,"Navigator",null,"Solution"]
[]
["Points","A private passenger automobile insurer sells policies through two distribution channels:"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('3'!A1,'Point Grid'!A:A,0))","v":2},"independent insurance agents and directly to consumers via the internet."]
[]
[null,"The company's rates already incorporate expense differentials between the two channels but"]
[null,"the head of sales has asked their actuary to file different pure premium factors for the two"]
[null,"groups."]
[]
[null,"The actuary wishes to evaluate the acceptability of the request against Actuarial Standard of "]
[null,"Practice No. 12 (Risk Classification)."]
[]
["(a)","Identify and briefly describe two considerations supporting inclusion of distribution channel in"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A13,'Point Grid'!$C$7:$I$7,0))","v":1},"the pure premium factors."]
[]
[]
["(b)","Identify and briefly describe two considerations against inclusion of distribution channel in the"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A17,'Point Grid'!$C$7:$I$7,0))","v":1},"pure premium factors."]

{"sheet":"4","index":7,"n_rows":16,"n_cols":9,"rows_kept":16,"cut":false,"hidden":false,"merged":[]}
[4,"Incomplete",null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","An actuary is conducting a generalized linear model (GLM) analysis on historical personal "]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('4'!A1,'Point Grid'!A:A,0))","v":3},"automobile data in order to develop a rating plan."]
[]
["(a)","Argue against the following factors being included as predictors in the actuary's GLM analysis:"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A6,'Point Grid'!$C$7:$I$7,0))","v":1.5},"   i. Limit of liability"]
[null,"  ii. Number of coverage changes during the current policy period."]
[null," iii. ZIP code of the garaging location of the automobile."]
[]
["(b)","The actuary is modelling pure premium with a log-link function and a Tweedie error distribution"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A11,'Point Grid'!$C$7:$I$7,0))","v":1},"(1 < p < 2). Provide two arguments against the inclusion of deductible as a predictor in the actuary's"]
[null,"GLM analysis."]
[]
["(c)","Other than including deductible as a predictor in the GLM, describe how to determine deductible"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A15,'Point Grid'!$C$7:$I$7,0))","v":0.5},"relativities and how such relativities can be incorporated in a GLM."]

{"sheet":"5","index":8,"n_rows":17,"n_cols":8,"rows_kept":17,"cut":false,"hidden":false,"merged":[]}
[5,"Incomplete",null,null,null,"Navigator",null,"Solution"]
[]
["Points","A GLM has been used to develop an insurance rating plan. The results are given below:"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('5'!A1,'Point Grid'!A:A,0))","v":2.25}]
[null,"Risk","Model Predicted Loss","Actual Loss"]
[null,1,2000,2050]
[null,2,500,220]
[null,3,1500,1480]
[null,4,800,850]
[null,5,200,400]
[]
["(a)","Plot the Lorenz curve for this rating plan. Label each axis and the coordinates of each point"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A12,'Point Grid'!$C$7:$I$7,0))","v":1.75},"on the curve."]
[]
[]
["(b)","Briefly describe how the Gini index is calculated and what the Gini index measures when"]
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[6,"Incomplete",null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","An actuary has constructed a three-variable Tweedie GLM with a log-link function to estimate loss "]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('6'!A1,'Point Grid'!A:A,0))","v":2.5},"ratios for commercial property new business. The actuary wants to create a second model for renewal"]
[null,"business that will include all of the variables from the new business model, plus a variable for the prior"]
[null,"year claim count. The actuary requires that the coefficients of the variables (Average Building Age,"]
[null,"log(Manual Premium), and Location Count) are consistent between the new and renewal models."]
[]
[null,"The fitted new business model parameters are as follows:"]
[null,"Variable",null,"Name","Estimate"]
[null,null,null,"Intercept",0.91]
[null,"Average Building Age (Years)",null,"age",1.2999999999999999E-2]
[null,"log(Manual Premium)",null,"logprem",-0.187]
[null,"Location Count",null,"loccnt",6.2E-2]
[]
["(a)","Calculate the modeled loss ratio for a new business policy with a manual premium of $25,000, an"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A16,'Point Grid'!$C$7:$I$7,0))","v":0.75},"average building age of four years, and having eight locations."]
[]
[]
["(b)","Briefly describe how to produce the renewal business model, and specify the resulting equation for"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A20,'Point Grid'!$C$7:$I$7,0))","v":0.75},"the renewal business modeled loss ratio."]
[]
[]
["(c)","Identify and briefly describe two techniques that the actuary can use to assess the stability of the new"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A24,'Point Grid'!$C$7:$I$7,0))","v":1},"variable in the renewal business model."]

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[7,"Incomplete",null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","A company is considering modifying its rating plan to include factors by age"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('7'!A1,'Point Grid'!A:A,0))","v":1.5},"group. Below are statistics for the base model and for the new model."]
[]
[null,"Statistic","Base Model","New Model"]
[null,"Log-likelihood",-750,-737.5]
[null,"Deviance",500,475]
[null,"Parameters",10,15]
[null,"Data points",1000000,1000000]
[]
["(a)","Calculate the Akaike Information Criterion (AIC) and the Bayesian Information"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A12,'Point Grid'!$C$7:$I$7,0))","v":1},"Criterion (BIC) for both models."]
[]
[]
["(b)","Explain whether AIC or BIC is a more reliable test statistic as an indicator of "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A16,'Point Grid'!$C$7:$I$7,0))","v":0.25},"whether to adopt the new model."]
[]
[]
["(c)","Recommend and briefly justify whether to adopt the new model."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A20,'Point Grid'!$C$7:$I$7,0))","v":0.25}]

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[8,"Incomplete",null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","Given the following average severity, an actuary wants to validate if anti-selection "]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('8'!A1,'Point Grid'!A:A,0))","v":2.75},"impacts its Increased Limits Factors for a given insurance coverage:"]
[null,null,null,"Policy Limit"]
[null,null,"Severity limited to:",25000,50000]
[null,null,10000,4000,6000]
[null,null,25000,6500,8000]
[null,null,50000,9000,10500]
[]
[null,"50% of the policies have a $25,000 policy limit and 50% of the policies have a $50,000"]
[null,"policy limit."]
[]
["(a)","Demonstrate if anti-selection impacts the ILFs."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A14,'Point Grid'!$C$7:$I$7,0))","v":1.25}]
[]
[]
["(b)","Identify and briefly describe two possible forms of anti-selection for ILFs and give one"]
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[9,"Incomplete",null,null,null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","An actuary and an underwriter are discussing a Workers' Compensation book of business."]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('9'!A1,'Point Grid'!A:A,0))","v":1.5}]
[]
["(a)","The underwriter is considering not renewing a risk in the book because the experience"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A6,'Point Grid'!$C$7:$I$7,0))","v":0.5},"modifier of the account has increased. The underwriter notes that the expected loss ratio"]
[null,"(ELR) for the predominant class code on the account has decreased over the last three years."]
[null,"Discuss whether the underwriter should non-renew the risk given the change in ELR."]
[]
["(b)","A different account had large losses last year and now has a debit modification. "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A11,'Point Grid'!$C$7:$I$7,0))","v":0.5},"The underwriter wants to renew this account since the debit mod will help recoup losses."]
[null,"Evaluate the underwriter's reasoning to renew the account."]
[]
["(c)","The underwriter points out that the book of business has an overall experience modifier"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A15,'Point Grid'!$C$7:$I$7,0))","v":0.5},"below 1.0 and believes this is due to superior risk selection. Provide two reasons why this"]
[null,"may not be the case."]

{"sheet":"10","index":13,"n_rows":32,"n_cols":10,"rows_kept":32,"cut":false,"hidden":false,"merged":[[27,5,28,5]]}
[10,"Incomplete",null,null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","An insured is subject to experience rating under the National Council on Compensation"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('10'!A1,'Point Grid'!A:A,0))","v":2.5},"Insurance (NCCI)'s Experience Rating Plan Manual for Workers' Compensation and"]
[null,"Employers Liability Insurance. The following information about the insured is given:"]
[]
[null,5000000,"Payroll (Experience Period)"]
[null,"Alabama","State"]
[null,7705,"Class"]
[]
[null,"The following claims apply to the experience period. Each claim involves only one person,"]
[null,"and none are disease claims:"]
[null,"Claim Number","Type","Loss"]
[null,1,"Indemnity",29000]
[null,2,"Medical",30500]
[null,3,"Indemnity",90000]
[null,4,"Indemnity",1500]
[null,5,"Medical",45000]
[]
["(a)","Calculate the experience modification for this insured."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A20,'Point Grid'!$C$7:$I$7,0))","v":2.5},"You may use the information given in the tables below."]
[]
[null,"Class Code","ELR","D Ratio"]
[null,7704,1.41,0.13]
[null,7705,2.02,0.17]
[null,7710,1.41,0.13]
[]
[null,"Expected","Weighting",null,"Expected","Ballast Value"]
[null,"Losses","Value",null,"Losses"]
[null,"63,979 – 78,055",0.12,null,"37,652 – 64,802",21000]
[null,"78,056 – 92,133",0.13,null,"64,803 – 95,998",24500]
[null,"92,134 – 106,385",0.14000000000000001,null,"95,999 – 128,908",28000]

{"sheet":"11","index":14,"n_rows":23,"n_cols":10,"rows_kept":23,"cut":false,"hidden":false,"merged":[[4,1,5,1],[4,4,5,4],[0,6,0,7],[4,6,5,6],[4,5,5,5],[4,3,5,3],[4,2,5,2]]}
[11,"Incomplete",null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","Given the following information about 10 risks for a manufacturing class:"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('11'!A1,'Point Grid'!A:A,0))","v":3.75}]
[null,"Risk","Type of Manufacturing","Manual Premium","Losses","Current Modification","Proposed Modification"]
[]
[null,1,"Uses Robots",1000,500,0.65,0.5]
[null,2,"Uses Robots",1000,600,0.75,0.55000000000000004]
[null,3,"Made by hand",1000,700,0.7,0.7]
[null,4,"Uses Robots",1000,800,1,0.75]
[null,5,"Uses Robots",1000,900,0.9,0.95]
[null,6,"Made by hand",1000,1100,1.1499999999999999,1.05]
[null,7,"Uses Robots",1000,1200,1.1000000000000001,1.25]
[null,8,"Made by hand",1000,1500,1.25,1.5]
[null,9,"Made by hand",1000,1600,1.2,1.75]
[null,10,"Made by hand",1000,1800,1.3,2]
[]
["(a)","Evaluate the proposed experience rating plan compared to the current plan."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A18,'Point Grid'!$C$7:$I$7,0))","v":3}]
[]
[]
["(b)","Evaluate the classification plan for this class."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A22,'Point Grid'!$C$7:$I$7,0))","v":0.75}]

{"sheet":"12","index":15,"n_rows":31,"n_cols":9,"rows_kept":31,"cut":false,"hidden":false,"merged":[]}
[12,"Incomplete",null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","An actuary is given the following sample of experience from a grouping of five similarly-sized risks:"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('12'!A1,'Point Grid'!A:A,0))","v":2.5}]
[null,null,"Risk","Actual Loss"]
[null,null,1,85000]
[null,null,2,127500]
[null,null,3,42500]
[null,null,4,63750]
[null,null,5,106250]
[]
["(a)","Construct a Table M of insurance charges and savings at entry ratios of 0 to 1.50 in multiples of 0.25."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A12,'Point Grid'!$C$7:$I$7,0))","v":1.5}]
[]
[]
["(b)","Briefly describe what the insurance charge at an entry ratio of 1.25 reflects."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A16,'Point Grid'!$C$7:$I$7,0))","v":0.25}]
[]
[]
[null,"Suppose the Table M constructed above is used to price a book of Workers' Compensation "]
[null,"retrospectively rated business. The following table of actual losses reflects the experience of this"]
[null,"book:"]
[null,null,"Risk","Actual Loss"]
[null,null,1,12000]
[null,null,2,42500]
[null,null,3,63750]
[null,null,4,106250]
[null,null,5,275000]
[]
["(c)","Evaluate the appropriateness of using the Table M constructed in part (a) above. "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A30,'Point Grid'!$C$7:$I$7,0))","v":0.75},"Provide two reasons in support of the conclusion."]

{"sheet":"13","index":16,"n_rows":33,"n_cols":8,"rows_kept":33,"cut":false,"hidden":false,"merged":[]}
[13,"Incomplete",null,null,null,"Navigator",null,"Solution"]
[]
["Points","A risk is written using a retrospective rating plan with the following characteristics:"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('13'!A1,'Point Grid'!A:A,0))","v":2.5},10000000,"Standard Premium"]
[null,0.6,"Expected Loss Ratio"]
[null,0.8,"Loss Ratio at Maximum Premium"]
[null,0.2,"Loss Ratio at Minimum Premium"]
[null,1.085,"Loss Conversion Factor"]
[null,0.97,"Provision for Losses and Total Expenses Exclusive of Taxes"]
[]
[null,"The following Lee Diagram depicts actual experience from a sample of similarly-sized risks"]
[null,"and similar to the risk in question:"]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
["(a)","Determine the converted insurance charge for this plan."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A28,'Point Grid'!$C$7:$I$7,0))","v":1.25}]
[]
[]
["(b)","The insured's actual ultimate losses are $8,700,000 and the final retrospective premium is"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A32,'Point Grid'!$C$7:$I$7,0))","v":1.25},"$12,500,000. Determine the tax multiplier that was used in the rating of this plan."]

{"sheet":"14","index":17,"n_rows":16,"n_cols":9,"rows_kept":16,"cut":false,"hidden":false,"merged":[]}
[14,"Incomplete",null,null,null,null,"Navigator",null,"Solution"]
[]
["Points","A retrospective rated policy has both a loss limitation and a maximum premium."]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('14'!A1,'Point Grid'!A:A,0))","v":1.75}]
[]
["(a)","Demonstrate how the charges for the loss limitation and the maximum premium overlap."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A6,'Point Grid'!$C$7:$I$7,0))","v":0.5}]
[]
[]
["(b)","Explain how the overlap is handled differently when using Table M versus Table L."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A10,'Point Grid'!$C$7:$I$7,0))","v":0.5}]
[]
[]
["(c)","An actuary is pricing a large Workers' Compensation policy with a fixed loss limit of $100,000."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A14,'Point Grid'!$C$7:$I$7,0))","v":0.75},"Recommend a table of insurance charges, Table M or Table L, that the actuary should use and"]
[null,"provide two reasons supporting the recommendation."]

{"sheet":"15","index":18,"n_rows":33,"n_cols":11,"rows_kept":33,"cut":false,"hidden":false,"merged":[[0,7,0,8]]}
[15,"Incomplete",null,null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","Given the following information about a Workers' Compensation book of business:"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('15'!A1,'Point Grid'!A:A,0))","v":1.75}]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[null,840000,"Standard Premium"]
[null,0.02,"Loss based assessment factor"]
[null,0.05,"Ratio of ULAE to Loss"]
[null,0.02,"General overhead expense"]
[null,0.04,"Risk load for credit risk"]
[null,0.05,"Acquisition expense"]
[null,0.03,"Taxes "]
[null,-8.7999999999999995E-2,"Profit"]
[]
["(a)","Calculate the deductible for an excess Workers' Compensation policy that minimizes the"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A28,'Point Grid'!$C$7:$I$7,0))","v":1.25},"insured's loss retention with a maximum premium of $100,000."]
[]
[]
["(b)","Contrast the profit load in a large dollar deductible (LDD) policy to the profit load in an "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A32,'Point Grid'!$C$7:$I$7,0))","v":0.5},"excess Workers' Compensation policy."]

{"sheet":"16","index":19,"n_rows":37,"n_cols":9,"rows_kept":37,"cut":false,"hidden":false,"merged":[[0,5,0,6]]}
[16,"Incomplete",null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","An actuary is given the following expiring policy information for a Workers' Compensation"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('16'!A1,'Point Grid'!A:A,0))","v":3.75},"Large Dollar Deductible policy:"]
[null,500000,"Expected Total Loss & ALAE"]
[null,100000,"Deductible"]
[null,0.4,"Percentage of Loss & ALAE Excess of $100,000"]
[null,0.2,"Percentage of Loss & ALAE Excess of $200,000"]
[null,0.05,"ULAE"]
[null,0.03,"Loss Based Assessment Factor"]
[null,0.17,"Profit and Variable Expenses"]
[null,15000,"Fixed Expense"]
[null,300000,"Aggregate Deductible"]
[]
[null,"There are no changes to these expenses and profit provision. The table of Insurance "]
[null,"Charges is displayed below:"]
[null,"Modified Table M for Similarly Sized Policies"]
[null,null,"Deductible"]
[null,"Entry Ratio",100000,200000,300000,400000]
[null,0.5,0.45,0.48,0.495,0.505]
[null,1,0.33,0.35,0.36499999999999999,0.37]
[null,1.5,0.27,0.30299999999999999,0.32500000000000001,0.35]
[null,2,0.185,0.24,0.26,0.28599999999999998]
[]
[null,"The insured would like to retain more risk and requests the price of the following options:"]
[null,"Option 1: Deductible of $200,000 with an aggregate deductible of $400,000."]
[]
[null,"Option 2: Excess Policy with self-insured retention of $200,000 on a per-occurrence basis."]
[]
["(a)","Calculate the difference in price between Option 1 and the expiring structure."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A30,'Point Grid'!$C$7:$I$7,0))","v":2.75},"Use linear interpolation as needed."]
[]
[]
["(b)","The insurer observed an upward trend of ground-up losses in the insured's industry for"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A34,'Point Grid'!$C$7:$I$7,0))","v":1},"the most recent year, but is unsure if this trend will continue in the future. Based on this"]
[null,"observation, recommend one of the two options for the insurer and fully support the"]
[null,"recommendation."]

{"sheet":"17","index":20,"n_rows":36,"n_cols":11,"rows_kept":36,"cut":false,"hidden":false,"merged":[[0,7,0,8],[16,7,17,7],[16,3,17,3],[16,2,17,2],[16,4,17,4],[16,5,17,5],[16,6,17,6]]}
[17,"Incomplete",null,null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","The original 2016 Q17 is no longer on the Exam 8 Syllabus. It has been replaced with 2015 Q5 which has"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('17'!A1,'Point Grid'!A:A,0))","v":2.5},"the same point value."]
[]
[null,"An actuary estimated the loss cost for Workers' Compensation insurance using a "]
[null,"multi-dimensional credibility method."]
[]
[null,"Given the following:"]
[null,"   • There were 2 classes in Hazard Group X."]
[null,"   • There were no major or minor permanent partial losses."]
[null,"   • Premium information was not available."]
[null,"   • Holdout sample of odd years was used as a proxy of the true mean."]
[]
[null,"Claim Count by Injury Type for Hazard Group X"]
[null,null,"Even Year 1",null,null,"Even Year 2"]
[null,null,"Fatal (F)","Permanent Total (PT)","Temporary Total (TT)","Fatal (F)","Permanent Total (PT)","Temporary Total (TT)"]
[null,"Class"]
[null,1,2,10,1000,1,12,1000]
[null,2,3,10,1000,2,13,1000]
[null,"Total",{"$f":"SUM(C19:C20)","v":5},20,2000,3,25,2000]
[]
[null,"Optimal Weights for Estimation of Permanent Total Injury Ratio"]
[null,null,"Fatal","Permanent Total"]
[null,null,0.2,0.3]
[]
["(a)","Determine the ratio of permanent total injury to temporary total injury for Class 2 using a "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A27,'Point Grid'!$C$7:$I$7,0))","v":1},"multi-dimensional credibility method."]
[]
[]
["(b)","Fully describe the steps involved in performing a quintile test to evaluate the actuary's work."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A31,'Point Grid'!$C$7:$I$7,0))","v":1}]
[]
[]
["(c)","Briefly describe one shortcoming of the individual class sum of squared errors test and briefly describe"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A35,'Point Grid'!$C$7:$I$7,0))","v":0.5},"why the quintiles test is a better way to evaluate the actuary's work."]

{"sheet":"18","index":21,"n_rows":11,"n_cols":13,"rows_kept":11,"cut":false,"hidden":false,"merged":[[0,8,0,10]]}
[18,"Incomplete",null,null,null,null,null,null,"Navigator",null,null,null,"Solution"]
[]
["Points","Catastrophe models were built to assist the insurance industry in quantifying the risk of"]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('18'!A1,'Point Grid'!A:A,0))","v":2},"natural disasters."]
[]
["(a)","For any two of the four basic modules of a catastrophe model, provide an example of "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A6,'Point Grid'!$C$7:$I$7,0))","v":1},"epistemic risk."]
[]
[]
["(b)","For any two of the four basic modules of a catastrophe model, provide an example of"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A10,'Point Grid'!$C$7:$I$7,0))","v":1},"aleatory risk."]

{"sheet":"19","index":22,"n_rows":39,"n_cols":10,"rows_kept":39,"cut":false,"hidden":false,"merged":[[0,6,0,7]]}
[19,"Incomplete",null,null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","In order for an insurance company to increase its return on capital, two reinsurance "]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('19'!A1,'Point Grid'!A:A,0))","v":3},"options are being considered:"]
[null,"   i. $5 million excess of $5 million per risk:"]
[null,"       • ALAE pro-rata"]
[null,"       • Rate = 18% of premium"]
[]
[null," ii. 20% Quota Share:"]
[null,"      • Ceding commission of 30%"]
[null,"      • Maximum ceded loss ratio of 150%"]
[]
[null,"The insurance company must hold capital to support a 1-in-100 year Probable Maximum"]
[null,"Loss. Additionally, the following information regarding the insurance company's"]
[null,"performance last year is given:"]
[null,50000000,"Premium",null,"Claims greater than $5,000,000"]
[null,15000000,"Expenses",null,null,"Loss","ALAE"]
[null,30000000,"Total Loss & ALAE",null,"Claim 1",7500000,1500000]
[null,0.05,"Return on Capital",null,"Claim 2",10000000,500000]
[]
[null,"The Aggregate Exceedance Probability curve for the insurance company is shown below:"]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
["(a)","Determine the impact each reinsurance option would have had on last year's return on"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A38,'Point Grid'!$C$7:$I$7,0))","v":3},"capital. Ignore investment income and taxes."]

{"sheet":"20","index":23,"n_rows":22,"n_cols":9,"rows_kept":22,"cut":false,"hidden":false,"merged":[[0,5,0,6]]}
[20,"Incomplete",null,null,null,"Navigator",null,null,"Solution"]
[]
["Points","A primary insurer has entered into property catastrophe excess of loss treaties with three "]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('20'!A1,'Point Grid'!A:A,0))","v":3},"reinsurers. The terms of the treaties are as follows:"]
[]
[null,"Reinsurer A:    100% of $100 excess of $200 written at a nominal rate on line of 10%."]
[null,"Reinsurer B:    100% of $100 excess of $300 written at a nominal rate on line of 7%."]
[null,"Reinsurer C:    100% of $100 excess of $400 written at a nominal rate on line of 4%."]
[]
[null,"Each treaty specifies a single mandatory reinstatement that is 100% pro-rata as to amount."]
[null,"The primary insurer incurs three covered loss events during the contract period:"]
[null,null,"Loss Number","Loss Amount"]
[null,null,1,380]
[null,null,2,260]
[null,null,3,600]
[]
["(a)","For each loss event, calculate the amount of loss retained by the primary insurer."]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A17,'Point Grid'!$C$7:$I$7,0))","v":0.75}]
[]
[]
["(b)","For each loss event, calculate the amount of reinstatement premium owed by the primary "]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A21,'Point Grid'!$C$7:$I$7,0))","v":2.25},"insurer to each of its reinsurers."]

{"sheet":"21","index":24,"n_rows":33,"n_cols":8,"rows_kept":33,"cut":false,"hidden":false,"merged":[[0,4,0,5],[7,3,8,3],[7,2,8,2],[7,4,8,4],[14,2,15,2],[14,3,15,3],[14,4,15,4]]}
[21,"Incomplete",null,null,"Navigator",null,null,"Solution"]
[]
["Points","An insurance company insures high value homes and plans to increase the maximum "]
[{"$f":"INDEX('Point Grid'!B:B,MATCH('21'!A1,'Point Grid'!A:A,0))","v":4},"property value they will insure next year. The company is considering purchasing a new"]
[null,"$4,000,000 excess of $4,000,000 reinsurance treaty. The reinsurer is given the following"]
[null,"limit profile:"]
[]
[null,null,"Insured Value Range","Experience Period On-Level Premium","Treaty Subject Premium"]
[]
[null,null,"$1,000,000 to $4,000,000",100000000,25000000]
[null,null,"$4,000,001 to $8,000,000",0,5000000]
[]
[null,"A reinsurance actuary has trended and developed the portfolio's historical losses for the"]
[null,"Experience Period:"]
[null,null,"Loss Size","Number of Claims","Experience Period Ground-up Loss"]
[]
[null,null,"Less than $1,000,000",200,22000000]
[null,null,"Greater than $1,000,000",10,18000000]
[null,null,"Total",210,40000000]
[]
[null,"The actuary is unsure if a Swiss Re Y3 or Y4 exposure curve is a better fit. The following"]
[null,"MBBEFD exposure curve formulas are available along with the following information:"]
[]
[]
[]
[null,null,null,"% of Cumulative Loss"]
[null,null,"% of Insured Value","Y3","Y4"]
[null,null,0.25,0.6,0.73]
[null,null,0.4,0.72,0.82]
[null,null,1,1,1]
[]
["(a)","Given a proposed treaty rate of 1% of total subject premium, calculate the expected ceded"]
[{"$f":"INDEX('Point Grid'!$C$8:$I$30,MATCH($A$1,'Point Grid'!$A$8:$A$30,0),MATCH(A32,'Point Grid'!$C$7:$I$7,0))","v":4},"loss ratio for the new treaty."]