Which of the Following Statements Is (Are)true About the Loss

question 24

Multiple Choice

Which of the following statements is (are) true about the loss ratio method of class rating?
I.The pure premium is calculated,and it is loaded to cover expenses,profit,and contingencies.
II.The actual loss ratio is compared to the expected loss ratio,and the rate is adjusted accordingly.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Holder in Due Course

A person who has acquired a negotiable instrument in good faith and for value, therefore having certain legal protections.

Payee

The individual or entity to whom a check, draft, or promissory note is made payable.

First in Time

A principle stating that rights or privileges are assigned to those who are first to take action or establish legal claim.

Priority in Bankruptcy

The ranking order established by bankruptcy law that determines the sequence in which creditors are paid from a debtor's estate.