In Part 7, which section describes net loss & LAE unpaid and NWP on loss sensitive contracts, relative to all contracts, for each Schedule P line?

• A. Section 2
• B. Section 3
• C. Section 1
• D. Section 5

Answer: (C)

The item is asking about how Schedule P Part 7 presents a cross-line, relative measure of risk exposure: specifically, the amount of net loss and LAE unpaid and the net written premiums on loss-sensitive contracts as a share of all contracts, shown for each Schedule P line. That kind of relative, line-by-line summary is laid out in the first section of Part 7, serving as the baseline cross-line snapshot. It’s designed to let you see, for every line of business, how much of the unpaid loss and LAE and how much premium base comes from loss-sensitive contracts compared with everything else. Loss-sensitive contracts tend to drive reserve volatility and premium variability, so having this relative view by line early in Part 7 helps actuaries assess concentration and risk across the portfolio. The other sections of Part 7 provide different breakdowns or detail, but they do not exist to describe this primary cross-line relative measure.