Identify the Correct Statement About Experience Rating in Group Insurance

question 5

Multiple Choice

Identify the correct statement about experience rating in group insurance.

• A)It provides a direct economic incentive for risk managers to control claims.
• B)The experience of smaller groups is considered sufficiently statistically credible or reliable to determine premiums completely.
• C)The smaller the group, the more credit the group receives for its own claims experience.
• D)Most small companies have experience-rated premiums in which the group's own claims experience affects the cost of coverage.
• E)Final experience-rated premiums exclude administrative charges and fees.

Comprehend how partnerships are formed and dissolved.

Analyze the role of individual partners in the management and liability of the partnership.

Explain the process and legal requirements for altering partnership structures or member roles.

Grasp the concept of duty of loyalty and care in partnerships.

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Definitions:

Commercial Substance

The notion that a transaction significantly alters the cash flows that the economic entity would otherwise expect.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, project, or business activity.

Fair Value

The monetary return from asset divestiture or the financial responsibility for liability transfer occurring in an organized marketplace exchange at the valuation juncture.

Book Value

Book Value is the value of an asset as recorded on the company's balance sheet, representing the asset's cost minus accumulated depreciation or amortization.