Free CAS Exam 5 (Basic Ratemaking and Reserving) Principles, Implementation & Regulation Practice Questions
Practice 30 free Principles, Implementation & Regulation questions for CAS Exam 5 (Basic Ratemaking and Reserving).
30 Questions
10 Easy
15 Medium
5 Hard
2026 Syllabus
Sample Questions
Question 1
Easy
In a prior-approval regulatory jurisdiction, which statement best describes how the regulatory regime shapes the filing of a proposed rate change?
🎉
Correct Answer: B
Solution
B is correct. Under a prior-approval regime the insurer must submit its rate filing and obtain the regulator's affirmative approval before the new rates may take effect. This front-loads the regulatory review into the filing process, so anticipated objections, supporting exhibits, and the size of the requested change all influence how the proposal is built and how long implementation may take.
Question 2
Medium
In implementing a rating plan, what is the primary purpose of a minimum premium?
🎉
Correct Answer: B
Solution
B is correct. A minimum premium is a floor applied when the premium produced by the rating algorithm is very small. It ensures that every policy contributes enough to cover the fixed expenses and the basic cost of providing coverage, which do not scale down proportionally with a tiny exposure.
Question 3
Hard
A private-auto rating algorithm computes premium as a base rate of $500 multiplied by three relativities drawn from a fitted GLM (0.85, 1.10, and 1.20), then adds a $75 policy fee. The company applies a minimum premium of $650. What premium is charged for this risk?
🎉
Correct Answer: E
Solution
E is correct. Apply the base rate and relativities: 500×1.20×0.85×1.10=561. Add the policy fee: 561+75=636. Because $636 is below the $650 minimum premium, the minimum binds and the charged premium is $650.
FreeFellow is a free exam prep library for actuarial (SOA & CAS), CFA, CFP, CPA, CAIA, GARP FRM, IRS Enrolled Agent, IMA CMA, and FINRA / NASAA securities licensing candidates. The entire question bank, written solutions, and lessons are free for every candidate, with no trial period and no credit card. Every constructed-response item has a copy-to-AI prompt builder so candidates can paste their answer into their own ChatGPT or Claude for self-graded feedback; Fellow members get instant AI grading on essays against the official rubric (currently CFA Level III, expanding to other essay-bearing sections).
The 70% you need to pass (question bank, written solutions, lessons, formula sheet, mixed practice, readiness tracking) is free forever, with no trial period and no credit card. Become a Fellow ($59/quarter or $149/year per track) to unlock mock exams, flashcards with spaced repetition, performance analytics, AI essay grading, and a personalized study plan.