The Independent Insurance Agents of America conducted a survey of insurance consumers and discovered that 48% of

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The Independent Insurance Agents of America conducted a survey of insurance consumers and discovered that 48% of them always reread their insurance policies, 29% sometimes do, 16% rarely do, and 7% never do. Suppose a large insurance company invests considerable time and money in rewriting policies so that they will be more attractive and easy to read and understand. After using the new policies for a year, company managers want to determine whether rewriting the policies significantly changed the proportion of policyholders who always reread their insurance policy. They contact 380 of the company’s insurance consumers who purchased a policy in the past year and ask them whether they always reread their insurance policies. One hundred and sixty-four respond that they do. Use a 1% level of significance to test the hypothesis.


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