AAIS Offering New ERP in Commercial Liability Program

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.