Insurers can now have access to a new plan for incorporating an account's loss experience into its commercial liability rating.
The American Association of Insurance Services (AAIS), a national insurance advisory organization that develops standardized policy forms and rating information for P&C insurers throughout the United States, is initiating a countrywide filing of a new experience rating plan (ERP) in its Commercial Liability Program.
AAIS says its new Commercial Liability ERP provides carriers with a process for selecting and applying a factor for modifying a policy's premium to reflect how a risk's loss experience over the previous three or five years compares with a benchmark for its industry. Eligibility under the plan is said to extend to risks that have three or five years of premium and loss data, and that pay at least $1,000 in annual premium. Manual rules and step-by-step instructions also were created for calculating the experience modification factor, and applying it to the premium for both the premises/operations and products/completed work exposures.
The plan will be filed as a manual supplement with a proposed effective date of April 1, 2011, in most states, says AAIS.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access