Free CAS Exam 5 (Basic Ratemaking and Reserving) Ratemaking Data & Exposures Practice Questions

Ratemaking data and exposures open the Ratemaking section of CAS Exam 5, which carries 45-55% of the exam (CAS). Questions test choosing and defending an exposure base, organizing premium, loss, and exposure data on calendar year, accident year, policy year, report year, and in-force bases, vetting pricing data for errors and unreasonable results, and partitioning data so each group stays homogeneous without losing credibility.

24 questions 9 easy 13 medium 2 hard 2026 syllabus

Sample Questions

Question 1 Easy
Which of the following best describes the role of an exposure base in the ratemaking process?
Solution
C is correct. An exposure base is the fundamental measure of the amount of risk an insurer assumes. In the rating algorithm, premium equals the rate (price per unit of exposure) multiplied by the number of exposure units. Because pure premium is defined as losses divided by exposures, the exposure base serves as the denominator that normalizes loss experience so rates can be developed on a per-unit basis.
Question 2 Medium
While vetting exposure data for a stable book of annual policies, a reviewer finds that reported earned exposures exceed written exposures in every year. What is the most appropriate first response?
Solution
A is correct. Earned exposures can never exceed written exposures over the life of a stable book, because exposure is earned only after it has first been written. Observing earned above written in every year fails a basic reasonableness check and points to a data problem such as double-counting, a units mismatch, or a mapping error. The correct action is to investigate and correct the data before relying on it.
Question 3 Hard
Three one-year policies are shown below. Premium is earned uniformly over each policy term. Compute the calendar year 2025 earned premium across all three policies.

| Policy | Effective date | Term | Annual premium |
|---|---|---|---|
| A | Jan 1, 2025 | 1 year | $1,200 |
| B | Jul 1, 2025 | 1 year | $2,400 |
| C | Oct 1, 2024 | 1 year | $1,800 |
Solution
C is correct. Earned premium in calendar year 2025 is the portion of each policy's term that falls within 2025, times its annual premium. Policy A runs entirely in 2025, earning all $1,200. Policy B (effective July 1, 2025) earns 6 of 12 months in 2025: . Policy C (effective Oct 1, 2024, expiring Sep 30, 2025) earns 9 of 12 months in 2025: . The total is .
Create a Free Account to Access All 24 Questions →

This topic is one part of the full Free CAS Exam 5 Practice Questions, free with step-by-step solutions and no signup.

Guides & Articles

CAS Exam 5 Study Guide (Basic Techniques for Ratemaking and Estimating Claim Liabilities, 2026)

About FreeFellow

Jeffrey Ting, founder of FreeFellow
Jeffrey Ting
FSA, CFA · Founder

FreeFellow was built by Jeffrey Ting, a credentialed actuary and CFA charterholder who passed thirteen of the hardest exams in finance on the first attempt, and paid four-figure prep fees for every one. The learning itself was always free. The price was a moat.

So he started writing his own questions, then lessons, then mock exams, until it grew into a full prep platform covering 40 finance credentials with more than 44,000 original practice questions. The name says exactly what it is: the question bank is free, and Fellow is what you become once you pass.

01
Cost shouldn't decide who gets in.

The exam is a fair gate. A four-figure prep course is not. FreeFellow takes the second gate down, so the exam is the only one left.

02
Free should mean free.

No trial clock, no email gate, no credit card. The question bank, worked solutions, lessons, and readiness score stay free, and they are enough to pass.

03
Built by someone who sat where you sit.

He paid for the big-name courses, found nothing he respected, and built the prep he wished had existed. Not a marketing team that has never sat an exam.

Meet the founder ›Read the values ›