The question says "On April 1, 2014, the company wrote its first and only insurance policy -- a 12 month WC policy". In this case, I would have proceeded as below.
EP = (9/12) * WP
UEPR = 50% (WP - EP)
The official CAS solution uses 8.5/12 for EP calculation. Should't this apply only if policies were written uniformly through out the whole month? What am I missing?
EP = (9/12) * WP
UEPR = 50% (WP - EP)
The official CAS solution uses 8.5/12 for EP calculation. Should't this apply only if policies were written uniformly through out the whole month? What am I missing?
Fall 2015, Q15: UEPR calculation