ABA CTFA Practice Test - Questions Answers, Page 82

Extrapolation of historical dollars, projection of separate frequency data, use of expected loss ratios are all projection methods for:

Which projection method uses paid losses plus reserves on outstanding claims?

Average severities projection method uses various claim count and average cost per claim date on either a paid or insured basis.

Inflation in Defense & Cost Containment (DCC) is evaluated separately and is estimated to occur at the same rate as the rate of inflation in the losses.

Adjusting and Others (AO) reserves are often provided for by using the calendar year paidto- paid method rather than the accident year paid-to-paid method used for Inflation in Defense & Cost Containment (DCC) reserves.

Which of the following is NOT the way to make changes in variables that can be considered in the loss reserving process?

The establishment of loss reserves generally requires considerable judgment and knowledge of the entity's business is known as:

With which standard, the auditor's substantive procedures must include reconciling the financial statements to the accounting records and should include examining material adjustments made during the course of preparing the financial statements.

A stock life insurance company writing both participating and nonparticipating business must follow special accounting procedures under the laws of certain jurisdictions. The purpose of these special accounting procedures is to provide for: