Fall 2014 #23
The examiner's report indicates a common error for part B was "Not including the reasons for the adverse development."
Using the information provided in the question, how do you come up with reasons for adverse develoment?
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The examiner's report indicates a common error for part B was "Not including the reasons for the adverse development."
Using the information provided in the question, how do you come up with reasons for adverse develoment?
Comments
This was a bit of an unfair question because, as you said, they did not provide any information on possible causes of adverse development within the question.
The excerpt from COPLFR below explicitly states that any adverse development must be explained. So for the purposes of this problem, you could have made up anything. For example, you could have written something completely ridiculous like the adverse development was due to King Kong unexpectedly attacking the the Empire State Building causing higher than normal property losses in those particular years. The question was simply testing whether you knew that an explanation was required.
do you think they would have excepted a statement saying that the adverse development would need to be explained but due to the lack of data provided we aren't able to draw a conclusion
I think that's a reasonable way to answer the question. I can't speak for the graders, but I would give credit for that.