An Approximation for the Testing of Private Passenger Liability Territorial Rate Levels Using Statewide Distribution of Classification Data

The purpose of this paper is to explore the possibility of developing a method of testing private passenger liability territorial rate levels by substituting the statewide distribution of classification data for the actual distribution by rating territory. Such a method should be useful to small independent companies and could be used by company actuaries as a basis for estimating the adequacy of their rate levels.