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to understand if the term 'loss' includes ALAE in the
coverage and in the data available for analysis and how
any loss or loss and ALAE limits are to be applied.

Q5. Discuss the basic types of prospective
individual risk rating system.

OR

Q6. Write short notes on -

(i) Schedule rating
(ii) Experience rating
(iii) Composite rating

Ans. There are three basic types of prospective
individual risk rating systems. They are :

(i) Schedule rating - This is the only individual rating
system that does not directly reflect an entity's claim
experience.

In theory, it recognizes the characteristics that are
expected to have a material effect on an entity's
experience but that are not actually reflected in that

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