Premium Discount Plan
Definition of "Premium discount plan"
Plan whereby adjustments are made in the premium, as the premium increases to reflect the non proportionate increases in expenses. Generally, the expenses of acquisition costs, administrative costs of placing the policy on the insurer's books, taxes, and claims do not increase in proportion to the increase in the premium. Thus, the gross premium should not reflect a proportionate increase in expenses as the net single premium increases.
Popular Insurance Terms
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Arrangement between two or more insurance companies under which the parties to the agreement waive their subrogation rights against the other. Most such agreements are no longer in use. ...
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