Page 151 - ic92 actuarial

Foundations of Casualty Actuarial Science

(ix) Consider any other desired plan features such as
a minimum or maximum premium charge.

(x) Estimate if the system has an off-balance. If so,
correct it if indicated.

(xi) Review the system and determine if it meets the
stated goals and attributes of a good individual
risk rating system. If not, make changes to the
system.

(xii) Run sample calculations to see if the system
functions as expected. If not, make any indicated
changes.

(xiii) Collect necessary data and put the system into
use.

(xiv) Review the plan at least every three years to be
certain that it meets current needs. Needs can
change or the situation may change so that the
system no longer performs as expected. An
example of the latter is that a per occurrence limit
selected three years ago may no longer be
reasonable because of economic and social
inflation.

Sashi Publications - www.sashipublications.com 151

Copyright@ The Insurance Times. 09883398055 / 09883380339