ASP Fellowship II Practice Questions - ASP Fellowship Exam II - Actuarial Society Of The Philippines Exam

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An actuary is designing an experience rating scheme for a large group medical plan in the Philippines. Which of the following credibility formulas is most commonly applied to determine the experienced-rated premium?

Premium = Z * (Claims + Expenses) + (1 - Z) * Manual Premium Premium = Z * (Claims) + (1 - Z) * (Expenses + Net Worth) Premium = Z * (Manual Premium) + (1 - Z) * (Claims * Expenses) Premium = Z * (Paid Claims / Paid Premiums) + (1 - Z) * Margin

Correct Answer:

Premium = Z * (Claims + Expenses) + (1 - Z) * Manual Premium

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