Which of the following statements about experience rating is (are)true?
I.The insured's past loss experience is used to determine the premium for the next policy period.
II.Its use is generally limited to small firms whose actual experience lacks credibility.
A)I only
B)II only
C)both I and II
D)neither I nor II

Question

Quizplus · Accepted Answer

Experience rating involves adjusting premiums based on an insured's past loss experience, making it more reflective of the risk they pose. It is more commonly applied to larger firms with credible loss data, not limited to small firms.

Which of the Following Statements About Experience Rating Is (Are)true