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
Language in the insurance policy that can be considered unclear or subject to different interpretations. Under these circumstances, the courts have generally ruled in favor of insured ...
Deduction allowed for gifts and bequests to a spouse for federal estate and gift tax purposes. Under the Economic Recovery Tax Act of 1981 (ERTA), the deduction became unlimited. Prior to ...
Replacement for the earlier Family Automobile Policy (FAP) with these nine basic coverages: Coverage A Liability, The company pays damages for which an insured becomes legally obligated ...
In life insurance, the exchange of a series of installment payments, as the result of an installment settlement, for a lump sum distribution. ...
Investment-oriented whole life insurance policy that provides a return linked to an underlying portfolio of securities. The portfolio typically is a group of mutual funds established by the ...
Retirement taken after the normal retirement age. For example, if the normal retirement age is 65 or 70 an employee may continue to work beyond those ages. Normally the election of deferred ...
The absolute liability in insurance can be defined as actions, inactions, or negligence that leads to losses or damages to a third-party. The insurer is obligated to determine the ...
Policy underwritten on either a monoline primary insurance or monoline excess insurance basis that will allow the purchaser to increase the limits of liability coverage above that of ...
Payments made on a monthly basis by users of the medical services of health maintenance organizations (HMOs). After this payment is calculated for a future period of time, usually one year, ...
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