24. Nash Corporation's workers compensation policy has a 1.55 experience modification, largely attributable to a major industrial accident 2 years ago. Nash's insurer has been litigating the claim and recently recovered $1 million from the entity primarily responsible for that accident. How, if at all, will the insurer's subrogation recovery affect Nash's experience modification when the policy is renewed? oa. Nash's experience mod will be higher than it would have been without the recovery. b. Nash's experience mod will be lower than it would have been without the recovery. Oc. Nash's experience mod will be reset to 1.00. od. Nash's experience mod will be unaffected because a subrogation recovery has no bearing on experience modifications.

Principles of Economics 2e
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Publisher:Steven A. Greenlaw; David Shapiro
Chapter16: Information, Risk, And Insurance
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24. Nash Corporation's workers compensation policy has a 1.55 experience modification,
largely attributable to a major industrial accident 2 years ago. Nash's insurer has been litigating
the claim and recently recovered $1 million from the entity primarily responsible for that
accident. How, if at all, will the insurer's subrogation recovery affect Nash's experience
modification when the policy is renewed?
oa. Nash's experience mod will be higher than it would have been without the recovery.
b. Nash's experience mod will be lower than it would have been without the recovery.
Oc. Nash's experience mod will be reset to 1.00.
od. Nash's experience mod will be unaffected because a subrogation recovery has no bearing on
experience modifications.
Transcribed Image Text:24. Nash Corporation's workers compensation policy has a 1.55 experience modification, largely attributable to a major industrial accident 2 years ago. Nash's insurer has been litigating the claim and recently recovered $1 million from the entity primarily responsible for that accident. How, if at all, will the insurer's subrogation recovery affect Nash's experience modification when the policy is renewed? oa. Nash's experience mod will be higher than it would have been without the recovery. b. Nash's experience mod will be lower than it would have been without the recovery. Oc. Nash's experience mod will be reset to 1.00. od. Nash's experience mod will be unaffected because a subrogation recovery has no bearing on experience modifications.
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