1. Just answer the question and requires some research against Lecture 7 as well as your thoughts on different elements/operation of these programs.
2. On Exercise 3 question 1, first part，in slide 13 of Lecture 7, one of the bullet points state that “But when claim costs exceed a limit as established within a state, an extra premium is applied to both good and bad companies (everybody pays more). Good companies get penalized for actions of the bad ones.”
The first part of question 1 is asking your opinion on whether this approach (good winds up paying for the actions of the bad) is fair? If so, why and if not, why not.