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> From: DANA_JOSEPH@royal-usa.com
> To: studygroup6@lists.casact.org
> Subject: Head - Stated amount coinsurance rates
> Date: Friday, March 20, 1998 11:04 AM
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> Background:
> In Head's article on Insurance to Value, he talks about Stated Amount
> Coinsurance rates on page 104. He states: "Since, under an agreed amount
> clause, the policy face generally equals the full property value
determined
> by an insurance agent and an insured, losses exceeding the policy face
can
> be presumed impossible." He then gives a formula specifically for stated
> amount (aka agreed amount) insurance that is different than the usual
> coinsurance rate. He also works some examples where he ignores any losses
> above the stated amount. He does not cap, but totally ignores! In my
> opinion, his examples DO AGREE with his formula.
>
> The issue is this:
> Brosius worked a "stated amount" problem at the NEAS seminar in Chicago
> (Session 10, question 46), but he caps values above the stated amount
> instead of ignoring them. The NEAS Study Schedule states that some of
> Head's exhibits are incorrect but his formulas are correct - and to go by
> the formulas.
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> To make matters worse:
> The Casualy Study Manuals Part 6 manual works a similar problem (1990,
> question 49) by ignoring any probabilities above the stated amount. The
> All-10 Study Manual solution for the same problem is worked by capping
(the
> Brosius way) and comes up with a very different answer. Incidentally, the
> only other stated amount problem is from 1981 (CSM calculates by ignoring
> values above stated amount and All-10 doesn't go back that far).
>
> My request:
> I have 4 fellow Part 6 students confused on this issue so far. Does
anyone
> have the actual CAS solution for the 1990 exam-question 49? Does anyone
> have Brosius's and/or Feldblum's email addresses so that I can ask an
> authority?
>
> Any help is appreciated,
> -Dana Joseph
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>