Referring back to the Texas Department of Insurance data on closed claims for medical malpractice liability...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Referring back to the Texas Department of Insurance data on closed claims for medical malpractice liability insurance presented in Problem 5, we wish to see if medical malpractice was more risky to the insurer during the 1998-2001 period than it was in the 1994-1997 period. The data from 1994 until 2001 was: Injury year Estimated # claims Estimated $ per claim 1994 1021 $415.326.26 1995 1087 $448,871.57 1996 1184 $477,333.66 1997 1291 $490,215.19 1998 1191 $516,696.63 1999 1098 $587,233.93 2000 1055 $536,983.82 2001 1110 $403,504.39 a. Calculate the standard deviation in the estimated payment per claim for medical malpractice insurance in Texas over the four-year period 1994-1997. Answer: 28792.23 b. Calculate the standard deviation in the estimated payment per claim for medical malpractice insurance in Texas over the four-year period 1998-2001. Answer: 67220.69 c. Which time period was more risky (in terms of the standard deviation in payments per claim)? Answer: The period from 1998 to 2001 was more risky. d. Using the results of (c) above, do you think the medical malpractice insurers raising rates during the period 1998-2001 was justified on the basis of assuming additional risk? Referring back to the Texas Department of Insurance data on closed claims for medical malpractice liability insurance presented in Problem 5, we wish to see if medical malpractice was more risky to the insurer during the 1998-2001 period than it was in the 1994-1997 period. The data from 1994 until 2001 was: Injury year Estimated # claims Estimated $ per claim 1994 1021 $415.326.26 1995 1087 $448,871.57 1996 1184 $477,333.66 1997 1291 $490,215.19 1998 1191 $516,696.63 1999 1098 $587,233.93 2000 1055 $536,983.82 2001 1110 $403,504.39 a. Calculate the standard deviation in the estimated payment per claim for medical malpractice insurance in Texas over the four-year period 1994-1997. Answer: 28792.23 b. Calculate the standard deviation in the estimated payment per claim for medical malpractice insurance in Texas over the four-year period 1998-2001. Answer: 67220.69 c. Which time period was more risky (in terms of the standard deviation in payments per claim)? Answer: The period from 1998 to 2001 was more risky. d. Using the results of (c) above, do you think the medical malpractice insurers raising rates during the period 1998-2001 was justified on the basis of assuming additional risk?
Expert Answer:
Answer rating: 100% (QA)
To determine if the medical malpractice insurers raising rates during the period 19982001 was justif... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
Project L requires an initial outlay at t = 0 of $ 5 8 , 2 9 6 , its expected cash inflows are $ 1 1 , 0 0 0 per year for 9 years, and its WACC is 9 % . What is the project's IRR? Round your answer...
-
Using the article Comparing Crime Rates between Undocumented Immigrants, Legal Immigrants, and Native-born US citizens in Texas, write a 2-3 page-paper (double-spaced, 1-inch margins, times roman...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Write a method remove() that takes a linked-list Node and a string key as its arguments and removes every node in the list whose item field is equal to key.
-
Name and describe the four legally required employee benefits.
-
According to the News Wire "Market Shortage," (a) How large was the market shortage at the Church set price of $0? (b) If the Church had sold the tickets for $100, how would have quantity demanded...
-
Ramirez manufactures a standard cabinet for a DVD player. The variable cost per unit is \($15\). The fixed cost per unit is \($10\). The desired ROI per unit is $5. Compute the markup percentage on...
-
Compute the current ratio and acid-test ratio for each of the following separate cases. (Round ratios to two decimals.) Which company case is in the best position to meet short-term...
-
Alain Mire files a single tax return and has adjusted gross income of $308,000. His net investment income is $49,000. What is the additional tax that Alain will pay on his net investment income for...
-
Zumix Ltd bought a new machine on January 1, 2020 for a total of $33 million. The machine is expected to be functional for twelve years and is depreciated on a straight line basis. Said asset...
-
Based the feature of the costing system and how manufacturing firms could use it to evaluate and improve social and environmental performance. In addition, identify where manufacturing firms see the...
-
1.A company produces plastic kitchenware and uses costing system. Products go through three departments- Mixing, Molding, and Packaging. During the month of August, the following information made...
-
What are differenet audit tests that can be used to identify material misstatement of accounts payable. and how can they be applied.
-
Volunteer Corporation reported taxable income of $495,000 from operations this year. During the year, the company made a distribution of land to its sole shareholder, Rocky. The land's fair market...
-
3. A circular opening 3m in diameter in the vertical wall of a water tank is closed by a disc of 3m in diameter which can rotate about a horizontal axis as shown in the figure. The head of water is...
-
time series performance analysis. this section reports the performance of each target company (ross and tjx) in financial year 2018 as compared to 2017. performance of the company should be discussed...
-
How much more interest will be earned if $5000 is invested for 6 years at 7% compounded continuously, instead of at 7% compounded quarterly?
-
Logan Furniture Company manufactures living room furniture through two departments: Framing and Upholstering. Materials are entered at the beginning of each process. For May, the following cost data...
-
Tim Hortons purchases and roasts highquality whole bean coffees and sells them, along with other coffee-related products, primarily through its company-operated retail stores. The company is known...
-
Assume the same facts as in the preceding problem. However, also assume that the variable costs per room per day are $10. 1. Suppose the best estimate is a 53 percent general occupancy rate at an...
Study smarter with the SolutionInn App