How does the cross price elasticity of demand differ between substitute and complement goods.
(e) (3 points) Assume the only business of Company GHI is described in part (d). This business is subject to contractual arrangements such as provider fee schedules and hospital per diems. GHI is considering selling annuities starting in the near future. (1) Calculate the Claim Fluctuation underwriting risk for 2018. Show your work. (ii) Evaluate when GHI must start utilizing the Life RBC formula [Blue Blank] as opposed to the Health RBC formula [ Orange Blank] for their Medical Supplement business. (iii) Compare and contrast the Health RBC and Life RBC formula as it relates to underwriting risk and insurance risk, respectively.(a) (2 points) (1) Describe the differences among pricing methodologies used for Medicare Supplement products. Identify the typical reason a particular methodology will be chosen. (b) (4 points) Describe factors and data sources utilized in developing the pricing assumptions for Medicare Supplement policies. (c) (/ point) Describe requirements for Actuarial Communications as identified in ASOP 41. (d) (2 points) You are provided the following information: Company GHI sold a block of policies in 2018. Policies are issue age rated. The state approved a 6% rate increase to be effective on January 1, 2019. These policies were issued in one state where there is a minimum loss ratio requirement for the projection year (2020) of 75%. Annual medical trend is 5%. Annual aging and underwriting wearoff is 3%. Assume rate increases are 100% effective on January Ist and that medical trend and claim aging are effective mid-year. . 2018 experience is such that GHI received $10 million in premiums and had $7 million in incurred claims. (1) Describe different loss ratio standards that must be met for Medicare Supplement Products under the NAIC Model Regulation. (ii) Calculate the maximum rate increase for January 1, 2020 so that the projection satisfies the minimum loss ratio requirement. Show your work.36. A country can have an increased surplus in its balance of trade as a result of (A) an increase in domestic inflation (B) declining imports and rising exports (C) higher tariffs imposed by its trading partners (D) an increase in capital inflow (E) an appreciating currency 37. Policies intended to reduce demand-pull inflation are most likely to increase which of the following in the short run? (A) Gross domestic product (B) The labor force participation rate (C) The price level (D) Unemployment (E) Wage levels 38. An increase in the government budget deficit is most likely to result in an increase in which of the following? (A) The marginal propensity to consume (B) Exports (C) The real interest rate (D) The money supply (E) The simple multiplier 39. An increase in which of the following would be most likely to increase long-run growth? (A) Pension payments (B) Unemployment compensations (C) Subsidies to businesses for purchases of capital goods (D) Tariffs on imported capital goods (E) Tariffs on imported oil
