All of the Following Statements About Class Rating Are True

question 9

Multiple Choice

All of the following statements about class rating are true EXCEPT

• A)Exposures with similar characteristics are placed in the same underwriting class.
• B)The rate charged for each class reflects the average loss experience for that class.
• C)The complexity of class rating makes it inappropriate for personal lines coverages.
• D)It is based on the assumption that future losses to insureds will be determined by the same classification factors currently in use.

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Definitions:

Persuasive

Having the power to influence or convince others to adopt a particular viewpoint or to take a specific action.

Longer Messages

Communications that contain more content or information, often used in the context of persuasion or information dissemination.

Logical Order

The arrangement of ideas, statements, or events in a sequence that follows a coherent and orderly pattern, often used to enhance understanding or argumentation.

Balance Theory

A theory which proposes that the motivation to maintain consistency among one’s thoughts colors how people form new attitudes and can also drive them to change existing attitudes.