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:

A-not-B Error

A cognitive error, often seen in infants, where they mistakenly search for an object in the location where it was last found (location A), even after they have seen it hidden in a new location (location B).

Immature Visual Systems

A developmental phase where the visual apparatus of infants is not yet fully developed, affecting their ability to see clearly and process visual information completely.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed.

Dishabituation

A renewal of response to a stimulus following a period of habituation, often due to the introduction of a novel stimulus.