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有正在浏览此页的北美精算师学生咩？高顿网校力邀您来学习北美2014年精算师考试:SOA真题November2004Course5（1）。
COURSE 5
COURSE 5
MORNING SESSION
APPLICATION OF BASIC ACTUARIAL PRINCIPLES
SECTION A-WRITTEN ANSWER
COURSE 5: Fall 2004 - 2 - GO ON TO NEXT PAGE
Morning Session
**BEGINNING OF EXAMINATION**
COURSE 5
MORNING SESSION
1. (4 points)
(a) Describe the coverage in a business overhead expense disability income policy.
(b) You are given the following information:
Maximum monthly benefit 30,000
Maximum multiple of monthly benefit 15
Maximum benefit period 24 months
Insured start of disability January 1, 2003
Insured end of disability March 1, 2005
Elimination period 90 days
Calculate the payout to the insured for each of the scenarios:
Scenario Monthly Overhead Expense
I 36,000
II 18,000
III 22,500
Show all work.
2. (6 points) With respect to group health care benefits:
(a) Describe the various providers.
(b) Describe the various buyers.
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Morning Session
3. (4 points)
(a) Describe the actions a life insurance company can take to limit the effect of
policyholder misrepresentation.
(b) Given the following information for a company that offers life insurance with
smoker and nonsmoker rates:
Actual smokers 30% of insured
Smokers premium rate 5 per 1,000
Non-smoker premium rate 3 per 1,000
Expenses None
Calculate the amount of profit lost per 1,000 if 10% of smokers lied about
smoking and were issued as non-smokers.
Show all work.
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Morning Session
4. (6 points) For a defined benefit pension plan, you are given the following information:
Plan formula: 1% × 3-year Final Average Earnings × years of service from hire
Plan participants as of January 1, 2005:
Participant
Attained
Age
Prior
Year
Earnings
Service
to Date
Probability of
surviving in
service to age 65
Temporary
employment-based life
annuity of 1 per year
X 40 35,000 0 0.5040 11.8338
Y 50 50,000 10 0.6547 9.1844
Actuarial assumptions:
(12)
a????65 9.4131
Interest rate 7%
Assumed future annual salary increases 5%
Pay increases Beginning of the year
Actuarial cost method Entry age normal
Normal retirement age 65
Benefits payable for termination prior to
normal retirement age
None
Calculate the plan’s normal cost and accrued liability as of January 1, 2005.
Show all work.
5. (3 points) For variable annuities:
(a) Describe common death benefit options.
(b) Describe the effect of a decline in account value due to investment performance
for each death benefit option.
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Morning Session
6. (7 points) Describe the steps an insurance company takes to develop an individual life
insurance product.
7. (5 points) For a current medical plan and a proposed change to that plan, you are given
the following:
Deductible Coinsurance Out-of-pocket maximum
(excluding deductible)
Lifetime
maximum
Current Plan 100 80% 1,000 None
Proposed Plan 200 75% 1,400 None
Manual cumulative probability distribution
Range of Claims Frequency
Average
Annual
Claims
Annual
cost
Accumulated
Frequency
Accumulated
Annual Cost
0 0.25 0 0.00 1.00 3,500
0.01–50.00 0.05 40 2.00 0.75 3,500
50.01-150.00 0.10 100 10.00 0.70 3,498
150.01-250.00 0.20 210 42.00 0.60 3,488
…… …… …… …… …… ……
4,000.01-5,000.00 0.03 4,500 135.00 0.12 2,500
5,000.01-6,000.00 0.02 5,400 108.00 0.09 2,387
Assuming no change in utilization, calculate the percentage change on net medical claims
for the proposed plan change.
Show all work.
8. (5 points) Describe the types of insurance company risk that are typically
addressed by
required capital formulas.
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Morning Session
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COURSE 5: Fall 2004 - 7 - GO ON TO NEXT PAGE
Morning Session
COURSE 5
MORNING SESSION
APPLICATION OF BASIC ACTUARIAL PRINCIPLES
SECTION B-MULTIPLE CHOICE
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Morning Session
1. Under Medicaid, all of the following services are mandatory EXCEPT:
(A) Prosthetic devices
(B) Lab and x-ray
(C) Vaccines for children
(D) Home health care
(E) Family planning
2. In the U.S., all of the following entities pay income taxes EXCEPT:
(A) Mutual funds
(B) Non-qualified trusts
(C) Common-law partnerships
(D) Legal partnerships
(E) Large corporations
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Morning Session
3. With respect to market value adjustments, all of the following are true EXCEPT:
(A) Allows the company to reflect the market value of the liabilities when the policy
is surrendered
(B) Works in the policyowner’s favor when interest rates decline
(C) Adds equity and stability for the company
(D) Adds equity and stability for the policyholder
(E) Offsets the effect of adverse cash flows
4. For the traditional unit credit cost method, all of the following statements are true
EXCEPT:
(A) Would be used to determine plan termination liability
(B) Is a benefit allocation cost method
(C) Increase in accumulated plan benefit due to plan amendment increases normal
cost
(D) For a participant, the normal cost for a level benefit is likely to rise from year to
year
(E) Actuarial liability is equal to the actuarial value of the participant’s cumulative
benefit on the valuation date
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Morning Session
5. All of the following are bases for insurance company taxes EXCEPT:
(A) Earnings
(B) Capital
(C) Premiums
(D) Reserves
(E) Investment income less expenses
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Morning Session
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Morning Session
6. Each of questions 6 through 11 consist of an assertion in the left-hand column and a
reason in the right-hand column. Code your answer to each question by blackening
space:
(A) If both the assertion and the reason are true statements, and the reason is a correct
explanation of the assertion.
(B) If both the assertion and the reason are true statements, but the reason is NOT a
correct explanation of the assertion.
(C) If the assertion is a true statement, but the reason is a false statement.
(D) If the assertion is a false statement, but the reason is a true statement.
(E) If both the assertion and the reason are false statements.
6.
ASSERTION
Term to 100 is permanent
insurance.
BECAUSE
REASON
Term to 100 cash values are
similar to those of whole life
insurance.
7.
ASSERTION
The cost of a 31-day grace period
provision in an individual health
insurance policy is relatively
more than the cost of a similar
provision in an individual life
insurance policy.
BECAUSE
REASON
Modal premium loadings for
individual health insurance are
higher than those for individual
life insurance.
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Morning Session
8.
ASSERTION
During the lifetime of the debtor,
group credit life insurance can be
very profitable to the debtor.
BECAUSE
REASON
Dividends payable under a group
credit life insurance policy are
paid to the debtor.
9.
ASSERTION
For small group health business,
many states have risk pooling
programs.
BECAUSE
REASON
For small group health business, it
is necessary t
o distribute
additional risks associated with the
guaranteed issue requirement.
10.
ASSERTION
In a life insurance company, there
is a strong tendency to favor
solvency earnings as the primary
driver of pricing.
BECAUSE
REASON
In a life insurance company,
solvency earnings drive
stockholder investments in the
business.
11.
ASSERTION
Under the individual aggregate
actuarial cost method, there is
never an unfunded actuarial
liability.
BECAUSE
REASON
Under the individual aggregate
actuarial cost method, at inception
of the plan, there is no actuarial
liability for past service.
COURSE 5: Fall 2004 - 14 - GO ON TO NEXT PAGE
Morning Session
12. Rank the following pricing strategies in ascending order (lowest to highest) of price:
I. Predatory pricing
II. Skim pricing
III. Neutral pricing
IV. Penetration pricing
(A)
I
<
IV
<
III
<
II
(B)
II
<
I
<
III
<
IV
(C)
II
<
III
<
IV
<
I
(D)
IV
<
I
<
II
<
III
(E)
IV
<
II
<
I
<
III
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Morning Session
USE THIS PAGE FOR YOUR SCRATCH WORK
COURSE 5: Fall 2004 - 16 - GO ON TO NEXT PAGE
Morning Session
13. For a block of one-year term policies you are given:
Earned premium for 2004 3,401
Rate increase November 1, 2003 7%
Rate increase September 1, 2004 5%
Policies Uniformly distributed
Calculate the earned premium at current rates for 2004 using the parallelogram method.
(A) 3,458
(B) 3,561
(C) 3,564
(D) 3,644
(E) None of the above.
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Morning Session
USE THIS PAGE FOR YOUR SCRATCH WORK
COURSE 5: Fall 2004 - 18 - GO ON TO NEXT PAGE
Morning Session
14. For a pension plan you are given the following:
Actuarial cost method: Traditional unit credit
Normal retirement benefit: $30 per month per year of service
Early retirement benefit:
Accrued benefit reduced by 5% for each year before
age 65
Actuarial assumptions:
Interest rate 7%
Pre-retirement decrement other than early retirement None
(12)
a????64 9.25
(12)
a????65 8.75
Retirement age assumption
Age x Retiring rate at age x
64 0.4
65 1.0
Data for the sole participant
Age at hire 40
Age at January 1, 2004 62
Calculate the actuarial liability as of January 1, 2004.
(A) 58,257
(B) 59,537
(C) 60,633
(D) 65,095
(E) 80,885
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Morning Session
USE THIS PAGE FOR YOUR SCRATCH WORK
COURSE 5: Fall 2004 - 20 - GO ON TO NEXT PAGE
Morning Session
15. For an insured with group long-term disability (LTD) benefits, you are given the
following:
Pre-disability monthly earnings 5,000
Formula LTD benefit 60% of pre-disability earnings
Work earnings during disability 1,500 per month
Other income None
A = Reduced LTD monthly benefit based on the proportionate loss formula
B = Reduced LTD monthly benefit based on the 50% offset benefit
Calculate A – B.
(A) –2,150
(B) –150
(C) –120
(D) 350
(E) 1,850
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Morning Session
USE THIS PAGE FOR YOUR SCRATCH WORK
COURSE 5: Fall 2004 - 22 - GO ON TO NEXT PAGE
Morning Session
16. Company XYZ is re-pricing a universal life insurance product. You are given the
following:
Year 2003:
Profit margin: 3.5%
Premium margin: 75%
Annual sales: 20,000,000
Year 2004:
Price decrease: 20%
Projected annual sales: 22,500,000
Calculate the 2004 profit margin.
(A) –16.50%
(B) –14.65%
(C) –14.38%
>(D) 2.80%
(E) 15.42%
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Morning Session
USE THIS PAGE FOR YOUR SCRATCH WORK
COURSE 5: Fall 2004 - 24 - GO ON TO NEXT PAGE
Morning Session
17. Each of questions 17 through 20 consist of two lists. In the list at the left are two items,
lettered X and Y. In the list at the right are three items, numbered I, II, and III. ONE of
the lettered items is related in some way to EXACTLY TWO of the numbered items.
Indicate the related items using the following answer code:
Lettered Item
Is Related to Numbered Items
(A)
X
I and II only
(B)
X
II and III only
(C)
Y
I and II only
(D)
Y
I and III only
(E)
The correct answer is not given by (A), (B), (C) or (D).
17. X. Generally accepted accounting
principles (GAAP)
I. Use of Interest Maintenance Reserve
Y. Statutory accounting II. Allows for capitalization of deferred
acquisition costs
III. Considers agent balances as
nonadmitted assets
18. X. Reinsurance reserves held by
ceding company
I. Coinsurance
Y. Reinsurance reserves held by
reinsurer
II. Modified coinsurance
III. Coinsurance with funds withheld
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Morning Session
19. X. Defined contribution plan I. The benefit level is directly affected
by investment performance
Y. Defined benefit plan II. The benefits for employees who
change jobs frequently will likely be
inadequate
III. There is an opportunity for postretirement
benefit increases
20. X. Policy year data I. Most common method for compiling
actuarial data
Y. Accident year data II. Allows the pricing actuary to match
premiums and losses from one
accounting basis
III. Claims data almost always available
in this format
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Morning Session
21. Each of questions 21 through 26 consist of an assertion in the left-hand column and a
reason in the right-hand column. Code your answer to each question by blackening
space:
(A) If both the assertion and the reason are true statements, and the reason is a correct
explanation of the assertion.
(B) If both the assertion and the reason are true statements, but the reason is NOT a
correct explanation of the assertion.
(C) If the assertion is a true statement, but the reason is a false statement.
(D) If the assertion is a false statement, but the reason is a true statement.
(E) If both the assertion and the reason are false statements.
21.
ASSERTION
In a medical plan using a
capitation model, the provider
assumes more insurance risk than
the insurer.
BECAUSE
REASON
In a capitation model, the insurer
subcontracts with a provider to
perform a defined range of
services in return for fee schedule
reimbursement for each service
rendered.
22.
ASSERTION
After an insurer reimburses a
policyholder for losses under a
homeowner policy, the insurer
can sue a third party for
negligence and keep the total
proceeds of the settlement.
BECAUSE
REASON
A subrogation clause exists in
every homeowner’s policy.
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Morning Session
23.
ASSERTION
Regulation of reinsurance is
primarily concerned with
solvency.
BECAUSE
REASON
Reinsurance contracts are
generally subject to regulatory
approval.
24.
ASSERTION
Under a generational annuity
mortality table, the mortality rate
at age 50 for an individual
currently age 40 is less than that
for an individual currently age
30.
BECAUSE
REASON
A generational annuity mortality
table assumes mortality rates will
be subject to continuous
improvement.
25.
ASSERTION
In the early years of an old
age
security system, pay-as-you-go
funding will be more expensive
than a fully funded plan.
BECAUSE
REASON
In a fully funded old age security
system, investment earnings help
pay for future benefits.
26.
ASSERTION
A group insurance retrospective
premium rider will create a due
and unpaid premium on the
financial statement if experience
is worse than expected.
BECAUSE
REASON
Under a group insurance
retrospective premium rider, a
policyholder agrees to remit an
additional premium based on a
monthly review of the previous
month’s paid claims.
COURSE 5: Fall 2004 - 28 - GO ON TO NEXT PAGE
Morning Session
27. For a dynamic life insurance product at policy year t, you are given the following:
Account value 40,000
Surrender charge as a percentage of the account value 30%
Account value not subject to surrender charge 10%
Account value withdrawn 15%
Calculate the partial withdrawal charge.
(A) 0
(B) 600
(C) 1,620
(D) 1,800
(E) 10,800
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Morning Session
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COURSE 5: Fall 2004 - 30 - GO ON TO NEXT PAGE
Morning Session
28. For a pension plan, you are given the following:
Actuarial cost method: Projected unit credit
Normal retirement benefit: 2% of final salary for each year of service
Actuarial assumptions:
Interest rate 7%
Annual salary increase 5%
Pre-retirement decrement None
Retirement age 65
(12)
a????65 8.33
Data for the sole participant:
Age at hire 30
Age at January 1, 2003 45
Salary at January 1, 2003 40,000
Actual 2003 salary increase 10%
Calculate the experience loss for the plan as of January 1, 2004.
(A) –2,940
(B) –3,108
(C) –3,315
(D) –3,547
(E) –3,724
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Morning Session
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COURSE 5: Fall 2004 - 32 - GO ON TO NEXT PAGE
Morning Session
29. For a Property and Casualty insurer, you are given the following:
? Paid loss development factors based on cumulative payments.
1/0 2/1 3/2 ∞ / 3
1.63 1.23 1.12 1.02
? For accident year 2003 you have paid claims of 54,000 as of duration 1 (December
31, 2004).
? Expected loss ratio is 75%.
? Earned premium for accident year 2003 is 95,000
Using the chain ladder method, calculate the estimated loss reserves for accident year
2003 as of December 31, 2004.
(A) 17,250
(B) 20,544
(C) 21,878
(D) 69,681
(E) 75,878
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Morning Session
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COURSE 5: Fall 2004 - 34 - GO ON TO NEXT PAGE
Morning Session
30. A person, with current wealth of 25, has a utility function given by μ (x)=100x?x2.
Calculate the maximum wager this person would make in a game where there is a 20%
chance of winning 10 plus the return of the wager.
(A) 1.1
(B) 1.3
(C) 1.9
(D) 2.0
(E) 2.5
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Morning Session
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COURSE 5: Fall 2004 - 36 - GO ON TO NEXT PAGE
Morning Session
31. For a dynamic life insurance product, you are given the following:
Policy Month M-1 M
Fixed amount death benefit 40,000 40,000
Cumulative partial withdrawal 3,000 6,000
Account value at end of month 30,000 27,075
Minimum death benefit as % of account value 120% 120%
Annual Cost of Insurance (COI) charge rate per 1,000 net
amount of risk 2.00 2.20
Calculate the COI charge for policy month M under death benefit option A.
(A) 1.10
(B) 1.28
(C) 1.64
(D) 2.37
(E) 6.78
COURSE 5: Fall 2004 - 37 - GO ON TO NEXT PAGE
Morning Session
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高顿网校之经典总结：一个有事业追求的人，可以把梦做得高些。虽然开始时是梦想，但只要不停地做，不轻易放弃，梦想能成真。
高顿网校之经典总结：一个有事业追求的人，可以把梦做得高些。虽然开始时是梦想，但只要不停地做，不轻易放弃，梦想能成真。
