Feldblum WC - Exp Constants
( Susie_Harris@notes.pw.com )
Mon, 20 Apr 98 13:10:04 CDT
At the bottom of page 87 of Feldblum's WC reading, Feldblum states "The loss
constant premium must be offset in the manual rate premium. Thus, the manual
rate must be reduced by $20,000 / 2,300,000, or 0.87%."
He does not include the loss constant premium of 20,000 in the denominator of
total premium. However, in question 35 from
the 1995 exam (part c), the CSM manual includes the loss constant premium in
the denominator. Does anyone know which method is correct? Or, am I reading
the questions wrong (are they calculating different types of offsets)??
Thanks.