. Suppose that the incurred losses are $800,000 in one policy period. Mr. Arthur has a retrospective rating plan. Based on he following table, at the end of this policy period Arthur would still need to pay the insurer $ Standard Premium $800,000 Basic premium 20% Maximum premium $1,000,000

. Suppose that the incurred losses are $800,000 in one policy period. Mr. Arthur has a retrospective rating plan. Based on he following table, at the end of this policy period Arthur would still need to pay the insurer $ Standard Premium $800,000 Basic premium 20% Maximum premium $1,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

2. Suppose that the incurred losses are $800,000 in one policy period. Mr. Arthur has a retrospective rating plan. Based on
the following table, at the end of this policy period Arthur would still need to pay the insurer $
Standard Premium
$800,000
Basic premium
20%
Maximum premium
$1,000,000
Minimum premium
$400,000
Excess Loss Premium Factor 10%
Loss Conversion Factor
1.20
Tax Multiplier
1.10

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