What is the relationship between the underwriter and the actuary? How do they interact?
What will be an ideal response?
The underwriter uses the classification scheme and rates to select, reject and price exposures to loss. The actuary develops the classification scheme and rates for each classification. If the actuary does his/her job correctly and the underwriter classifies and charges the appropriate price, the insurer should be successful in its underwriting experience.
You might also like to view...
If the reorganization value of a company emerging from bankruptcy is larger than the fair values that can be assigned to specific assets, what accounting is made of the difference?
A. Because of conservatism, the difference is simply ignored. B. The difference is recorded as an expense immediately. C. The difference is capitalized as goodwill. D. The difference is recorded as a professional fee.
Which of the following statements is true regarding estate income tax returns filed on Form 1041?
A. Form 1041 has its own tax rate schedule. B. Estates are never liable for the alternative minimum tax. C. All estates are subject to the same estimated tax rules that apply to Form 1040. D. None of the answers are correct.