Some components of a gross premium pricing model are determinable from past experience. Other components may be influenced by precedent. All components are also affected by external influences. Factors other than a financial security system’s experience must be considered in establishing values for these gross premium components.
When setting assumptions for a gross premium pricing model, which of the following components do you think would be influenced by external factors? (Select all that apply.)
Choice 1 Commissions
Choice 2 Administration Expenses
Choice 3 Interest
Choice 4 Percentage of Premium Expenses
Jeez, I wonder if I should select ALL of them...
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