Experience Rating
Statistical procedure used to calculate a premium rate based on the loss experience of an insured group. Applied in group insurance, it is the opposite of manual rates. Here the premiums paid are related to actual claims and expense experience expected for that specific group. In prospective rating, the past three years loss experience of the insured is the basis for the premium calculation for the current year of coverage. In retrospective rating, the current premium rate for the current period of time is modified at the close of that period to reflect actual loss experience. The premium actually paid then can be adjusted, subject to a pre-agreed minimum and maximum rate.
Popular Insurance Terms
Percentage of first year's premium paid to compensate an insurance agent. This is known as the "First Years" to show how much new business the agent is generating, compared with renewal ...
Type of surety bond that guarantees the performance of public officials. Public officials are responsible for a broad range of property including fees that they collect, money that they ...
Type of major medical deductible amount that acts as a corridor between benefits under a basic health insurance plan and benefits under a major medical insurance plan. After benefits are ...
One who purchases insurance, usually property and liability and not life or annuities, by utilizing his or her own employee purchaser or licensed broker/agent at a minimum annual premium of ...
Dishonest statement to induce an insurance company to write coverage on an applicant. If the company knew the truth, it would not accept the applicant. Fraudulent misrepresentation gives a ...
Risk incurred by the insurance company after it makes the commitment to make the loan at some future time and the borrower may not accept the loan at that time. ...
Former arrangement under which retirement benefits payable to an employee who continued to work beyond normal retirement age were frozen, and not increased in recognition of added work ...
Term used in the reinsuring of disability income insurance policies in that, after an extended period of time expires (in addition to the elimination period found in the disability income ...
Detailed descriptive list made available to the survivor (s) of the insured showing: attorney, accountant, insurance agent, and location of important documents such as wills, power of ...
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