Which statement best describes the difference between Statistical Agents and Rating Bureaus?

• A. Statistical agents collect loss experience; rating bureaus prepare rate filings and submit to regulators on behalf of members.
• B. Rating bureaus collect loss experience and report it to regulators.
• C. Statistical agents regulate solvency; rating bureaus collect premium data.
• D. Rating bureaus regulate solvency; statistical agents file rate filings.

Answer: (A)

The concept being tested is the distinct roles of data collection versus rate development in insurance pricing. Statistical agents are the groups that gather loss experience data from insurers, which is used to analyze loss costs and support actuarial pricing work. Rating bureaus, on the other hand, take that data and the established pricing framework to develop rate structures, class codes, and rating plans, and they file those rates with regulators on behalf of member companies.

This is why the correct description fits: statistical agents collect loss experience; rating bureaus prepare rate filings and submit them to regulators on behalf of members. The other statements mix up responsibilities—rating bureaus don’t primarily collect loss data, regulatory duties aren’t performed by statistical agents, and rating bureaus don’t regulate solvency.