Fall 2018 Q3 b)

judyohjudyoh
in W-05-Premium
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Why is the expense fee included in the on-level factor calculation using EOE? Does this on-level factor mean that for all class Y policies written between April 1 2017 and April 1 2018, you apply this OLF to get the premium @ CRL?

Comments

  • GrahamGraham
    edited October 2023

    The EOE method means that you calculate the premium using the rating formula (including the additive expense fee) both on April 1, 2017 and the current date. The on-level factor is then just the latter divided by the former.

    And you don't necessarily apply the same factor to all policies written between April 1, 2017 and April 1, 2018. Using the EOE method, you would directly recalculate the premiums for all policies both on the effective date and the current date.

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