First Step: Calculations Using Uncapped Rates
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
(Data) Table 5 col.(5) Table 5 col.(10) (1)*(3) (Data) .85*(5) 1.15*(5) (3) within (6),(7) (1)*(8) Y=Knocked Out
Class Exposures Credibility Adjusted Rate Pre-Cap Off-Balance Corrected Rate (Set 0) Losses in Pre-Cap O-B Corrected Rate Present Rate Cap Below Cap Above Capped Rates (Set 0) Total Losses in Capped Rates Is Rate Knocked Out of TCF by Capping?
1 25 $ 1,978 $ 2,105 $ 52,617 $ 2,000 $ 1,700 $ 2,300 $ 2,105 $ 52,617
2 30 $ 1,022 $ 1,136 $ 34,087 $ 1,500 $ 1,275 $ 1,725 $ 1,275 $ 38,250 Y
3 36 $ 1,349 $ 1,451 $ 52,232 $ 1,200 $ 1,020 $ 1,380 $ 1,380 $ 49,680 Y
4 43 $ 731 $ 821 $ 35,482 $ 800 $ 680 $ 920 $ 821 $ 35,482
5 52 $ 979 $ 1,058 $ 54,863 $ 1,000 $ 850 $ 1,150 $ 1,058 $ 54,863
6 62 $ 1,008 $ 1,077 $ 67,007 $ 1,200 $ 1,020 $ 1,380 $ 1,077 $ 67,007
7 75 $ 786 $ 846 $ 63,149 $ 850 $ 723 $ 978 $ 846 $ 63,149
8 90 $ 615 $ 667 $ 59,764 $ 500 $ 425 $ 575 $ 575 $ 51,508 Y
9 107 $ 788 $ 833 $ 89,528 $ 750 $ 638 $ 863 $ 833 $ 89,528
10 129 $ 384 $ 422 $ 54,492 $ 375 $ 319 $ 431 $ 422 $ 54,492
11 155 $ 330 $ 362 $ 56,038 $ 300 $ 255 $ 345 $ 345 $ 53,404 Y
12 186 $ 315 $ 342 $ 63,576 $ 300 $ 255 $ 345 $ 342 $ 63,576
13 223 $ 330 $ 353 $ 78,664 $ 350 $ 298 $ 403 $ 353 $ 78,664
14 267 $ 259 $ 279 $ 74,520 $ 250 $ 213 $ 288 $ 279 $ 74,520
15 321 $ 283 $ 300 $ 96,191 $ 300 $ 255 $ 345 $ 300 $ 96,191
 
Total 1,801 $ 480 $ 518 $ 932,211 $ 489 $ 512 $ 922,932
Second Step: Test Correction Step Post Capping
(11) (12) (13) (14) (15) (16) (17)
Table 5 col.(7) (11)) Less Knockouts F*(12) (4)+(13) (14)/(1) (15) within (5),(6) Y=Knocked Out
Class Original Test Correction Basis Test Correction Basis Loss Knockouts Additional Losses for Test Correction Revised Test Corrected Total Losses Test Corrected Rate (Set 1) Capped Rates (Set 1) Is Rate Knocked Out of TCF by Capping?
1 $ 11 $ 11 $ 580 $ 53,197 $ 2,128 $ 2,128
2 $ 12 $ 626 $ 34,713 $ 1,157 $ 1,275 Y
3 $ 13 $ 671 $ 52,902 $ 1,470 $ 1,380 Y
4 $ 14 $ 14 $ 713 $ 36,195 $ 838 $ 838
5 $ 14 $ 14 $ 752 $ 55,616 $ 1,073 $ 1,073
6 $ 15 $ 15 $ 789 $ 67,796 $ 1,090 $ 1,090
7 $ 16 $ 16 $ 822 $ 63,970 $ 857 $ 857
8 $ 16 $ 852 $ 60,615 $ 677 $ 575 Y
9 $ 17 $ 17 $ 878 $ 90,406 $ 841 $ 841
10 $ 17 $ 17 $ 902 $ 55,394 $ 429 $ 429
11 $ 18 $ 922 $ 56,960 $ 368 $ 345 Y
12 $ 18 $ 18 $ 940 $ 64,516 $ 347 $ 345 Y
13 $ 18 $ 18 $ 955 $ 79,619 $ 357 $ 357
14 $ 18 $ 18 $ 968 $ 75,488 $ 282 $ 282
15 $ 19 $ 19 $ 980 $ 97,170 $ 303 $ 303
 
Total $ 235 $ 177 $ 12,349 $ 944,560 $ 524 $ 517
Reference Values for All Classes
A = (Last Table) Overall Average Rate in Data $ 518
B = Total Loss in Set 0 Rates $ 923,632
C= Total Losses in Data $ 932,211
D = C-B = Shortfall $ 9,279
E =Total Test Correction Basis on Non-Capped Classes (12) $ 177
F = D/E = Test Correction Factor 52.44