Alberta General Insurance Level 1 Practice Exam

What is the primary function of the Actuarial Department in an insurance company?

1. Investigating insurance claims

2. Setting rates for various classes of insurance

3. Regulating insurer investment

4. Licensing insurance brokers

The correct answer is: Setting rates for various classes of insurance

The primary function of the Actuarial Department in an insurance company is to set rates for different insurance policies or classes of insurance. This includes analyzing and evaluating data related to risk and probability in order to determine the appropriate premiums to charge for different types of insurance coverage. Option A, investigating insurance claims, is typically handled by a separate claims department. Option C, regulating insurer investment, is usually the role of a regulatory body or government agency. Option D, licensing insurance brokers, is the responsibility of a licensing department or agency. While these functions and roles may overlap to some extent within an insurance company, the primary function of the Actuarial Department is focused on determining rates for insurance policies.