The Compensation Experience Rating Plan—A Current Review, by Uhthoff Dunbar R
ASTIN Bulletin: The Journal of the International Actuarial Association
REVIEWS 303 Towards Statistically Based Fidelity Rates, by ZENAS M. SYKES, Jr. Fidelity rates have been established in the past primarily by the use of "informed judgment", in accordance with the position of fidelity-surety underwriters that statistical ratemaking methods were not applicable to the bonding lines. During the last several years, this position has been modified somewhat as underwriters have recognized the increasing similarities between fidelity bonding and casualty insurance; the
... rate structure, however, has yet to reflect the shift of opinion. The replacement of individual and schedule bonds by blanket coverages, particularly in the bank and commercial fields, with the accompanying shift in underwriting attention from the principal to the obligee, is probably the fundamental cause of this change in position, but there have been other more direct pressures towards statistically sounder fidelity rates. The author indicates some of the problems which will have to be solved in placing fidelity rates on a statistical basis.