ncci retrospective rating plan

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1、2014-CAS8§10NCCIRetroRatingPlanHCM5/13/14,Page585Section10,NCCIRetrospectiveRatingPlan382TheRetrospectiveRatingPlanManualwillbeattachedtoyourexam.Haveitwithyouwhenyoudopastexamquestions.Besuretolookthroughitallseveraldifferenttimesduringyourstudying.NotetheusefulTableofContentsint

2、hefrontofthemanual.Part4BhastheTableofExpectedLossRanges.Part4ChasaportionofTableM.Part4DhasatableofExpenseRatiosbysize.383IntheAppendix,about10pagesfromtheendofthemanual,notetheveryuseful“AnExampleofBasicPremiumFactorDetermination.”E+e-H/TTranslatingItem11,TableofInsuranceCharges

3、ValueDifference=.384c(E-ELF)G/T-H/TTranslatingItem12,TableofInsuranceChargesEntryDifference=.385c(E-ELF)1+0.8LERBelowItem12istheshowntheformulafortheICRLLadjustment:F=.1-LER382ExcludePart2,SectionIII,oncancelationprovisions.CASLearningObjectiveB5.383Manydecadesago,TableAwasused

4、byStockcompaniesandTableBwasusedbyNon-stockcompanies.Now,inmoststates,aninsurercanchoosewhichtableitwantstouseorcanfileitsownexpensetable.Ifusingthelargeriskalternativeratingoption,anythingagreedtobytheinsurerandinsuredisokay.384^Thisisequation14inGillamandSnader,withE=E-ELF.Withn

5、oaccidentlimit,ELF=0,andwegetequation10inGillamandSnader.385^Thisisequation13inGillamandSnader,withE=E-ELF.Withnoaccidentlimit,ELF=0,andwegetequation8inGillamandSnader.2014-CAS8§10NCCIRetroRatingPlanHCM5/13/14,Page586NCCIRetrospectiveRatingPlan:R=(b+cL)T,subjecttoaminimumofHanda

6、maximumofG.R=RetrospectivePremiumb=basicpremium=(basicpremiumfactor)(standardpremium).c=thelossconversionfactorL=lossessubjecttoanyapplicablelimitationT=TaxMultiplierH=minimumpremium=(minimumpremiumfactor)(standardpremium).G=maximumpremium=(maximumpremiumfactor)(standardpremium).T

7、hebasicpremiumprovidesfor:1.AcquisitionExpenses2.GeneralExpenses3.ProfitandContingencies4.Anetchargeforlimitingtheretrospectivepremiumbetweentheminimumandmaximum386retrospectivepremiums.Thelossconversionfactor,c,generallycoverstheULAEandALAEnotincludedwiththelossesintheretrospecti

8、veratingformula.387Thetaxmultipli