B3/B4. NCCI/ISO Experience Rating Plan

Question 1

Mod Formula

Answer 1

[Ap + WAe + (1-W)Ee + B] / [E + B]

Question 2

Max Mod

Answer 2

1.1 + 0.0004 * E/G

Question 3

Mod / AER

Formula

Answer 3

Mod = Z * AER - EER / EER
AER = Actual losses capped by basic limit and MSL + Expected Unreported / CSLC
Expected Unreported = sum(CSLC * EER * LDF)

Question 4

Basic Limit Expected Loss (BLEL) / Company Subject Loss Cost (CSLC)

Standard and Present Avg Method

Answer 4

Standard Method: ELR * Basic Limit Premium

Present Avg Method: Premium / Prospective Exposures * Historical Exposures * ELR

CSLC = BLEL * 13B * 13C * 14-5B or 14-5C

Question 5

What is Ballast Value for?

Answer 5

Limits the impact of any single loss to provide stability