R4 - Loss-Sensitive Discount
I want to make sure I'm pulling this equation correctly from the practice problems, is it always 30% wtd to Direct & 15% wtd to Assumed
so the Loss-Sensitive Discount = (Base Charge)[.3(% direct loss sensitive)+.15*(% assumed loss sensitive)]
Comments
Yes, this formula is correct, according to Odomirok Table 98. And this loss-sensitive discount is subtracted from the base charge in getting to the final charge.