CGL Experience Rating Plan Flashcards

1
Q

CIGL Mod formula

A
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2
Q

Company Subject Loss Cost

A

Expected loss for the risk, subject to basic policy limits, with adjustments; subject to experience modification

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3
Q

CSLC calculation, standard method

A
  1. BLEL = ELR x annual basic limits company premium
  2. Multiply by Table 13B factor
  3. Multiply by Table 13C factor
  4. Multiply by Table 14 factor (detrend)
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4
Q

Purpose of Table 13B PAFs

A

Brings loss costs for policy being rated up to an occurrence level

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5
Q

Purpose of Table 13C PAFs

A

Backs off from occurrence loss cost to loss cost of the prior policy type

This eliminates mid-tail coverage

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6
Q

Present Average Company Rate Method

A

Select special UW exposure base and calculate for policy period being rate and experience periods

Calculate average annual basic limits premium by subline

CSLC = AvgPrem x SpecExp x ELR x 13B x 13C x Detrend

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7
Q

Historical Exposures and Present Company Rates Method

A

Multiply exposures by current basic limit company rates

Multiply by ILFs at basic occurrence limits and actual policy annual agg limits

Sum across classes and locations to get one premium amount for each subline/year combination

CSLC = Premium x ELR x DeTrend

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8
Q

CIGL eligibility for schedule and/or experience rating

A

Z >= 0.03 for schedule rating

Z >= 0.07 for experience rating

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9
Q

Actual Experience Ratio (AER), CIGL experience rating plan

A
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10
Q

Comparing NCCI experience rating plan and ISO plan

A
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11
Q

Denominator of AER and EER

A

Expected ultimate losses and ALAE NOT limited by MSL

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12
Q

Expected development in ISO mod calculation

A

CSLC x EER x LDF

LDFs are 0 for claims-made policies

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13
Q

Assumed basic limit in ISO plan

A

Rule 5A ($100K) if not specifically listed

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14
Q

If ELR for manual premium does not equal actual ELR for risk

A

Multiply premium after mod by Expense Variation Factor

EVR = ELR for manual premium / actual ELR

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15
Q

Applying schedule rating in ISO plan

A

Sum up the individual credits/debits, capped at +/- 25%

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