|
Rate
Filings
The
ICRB submits annual rate filings to the Indiana Department
of Insurance each January first. In addition, because
of benefit level increases effective July first as passed
by the legislature, the ICRB may submit a “law only”
rate filing to reflect the impact of the benefit increase
on advisory rates. Listed below are summaries of recent
filings
Advisory
Rate Filing Effective January 1, 2008
(IDOI stamped "FILED" on 10/11/2007 which completes the approval process)
(IDOI stamped "FILED" on --/--/2007
which completes the approval process)
To
view the January 1, 2008 Rate Filing Document
(PDF)
>Click
Here<
Full
filing of advisory loss costs, advisory rates
and rating values for both voluntary and assigned
risk business effective January 1, 2008 for
new and renewal policies.
Summary
Overall
premium level change: 0.4%.
Formula: (1-0.023)*(1+0.022)*(1+0.005)-1
Overall
rate level change: 0.4%.
Formula: (1-0.023)*(1+0.022)*(1+0.005)*(1+0.000)-1
Components
of Premium Level Change
| Experience,
Trend & Benefits |
-2.3% |
| Loss
Based Expenses |
2.2% |
| Loss
Costs Change |
-0.2% |
| Other
Expenses & Taxes |
0.5% |
| Premium
Level Change |
0.4% |
| Change
in Expense Constant Offset |
0.0% |
| Rate
Level Change |
0.4% |
|
Average
Change by Industry Group |
Avg.
Rate |
% Rate Level Change |
Range
of Swing Limits
from Previous Rates
|
|
| Manufacturing |
$2.37 |
0.0% |
+25
to -25% |
| Contracting |
$4.41 |
0.9% |
+26
to -24% |
| Office |
$0.28 |
0.0% |
+25
to -25% |
| Goods
& Services |
$1.98 |
0.7% |
+26
to -24% |
| Miscellaneous |
$4.14 |
0.4% |
+25
to -25% |
| All
Classes Average |
$1.48 |
0.4% |
|
|
Source:
Tech Supplement, Appendix B-II(5)
Other
Changes:
-
Implied
Loss Cost Multiplier (LCM): 1.372 (1/Target Cost
Ratio)
-
Executive
officer weekly payroll:
-
Minimum
decreased from $336 to $335 ($17,420 annually)
-
Maximum the same at $2,700 ($140,400 annually)
-
Sole
proprietor, partner, LLC member who elect coverage:
-
Expense
constant the same at $250
-
Medical/Indemnity
split: 74%/26%
Source:
Tech Supp Exhibits I-A & I-B, line 15 avg, 2005 & 2004 years, and Exhibit I-C, line 3; developed to ultimate & projected to midpoint of policy year 2008
Loss
Ratios
|
Indemnity
|
Medical
|
Total
|
|
18%
|
43%
|
61%
|
Policy
year 2005 developed to ultimate at designated
statistical reporting level
Source: Tech Supp Appendix A-III, Section B
|
Target
Cost Ratio
|
Overhead
|
Total
|
|
72.9%
|
27.1%
|
100.0%
|
Tech
Supp Exhibit II-A, line 7
The
target cost ratio is the portion of premium
that funds loss and loss adjustment expense
(LAE). The complement of that is for funding
overhead provisions: production expenses, general
expenses, taxes, and profit & contingencies.
Advisory
Rate Filing Effective January 1, 2007
(Advisory rate filing and technical
supplement delivered to IDOI on 09/29/2006)
(IDOI stamped "FILED" on 10/11/2006
which completes the approval process)
To
view the January 1, 2007 Rate Filing Document
(PDF)
>Click
Here<
Full
filing of advisory loss costs, advisory rates
and rating values for both voluntary and assigned
risk business effective January 1, 2007 for
new and renewal policies.
Summary
Overall
premium level change: -3.1%.
Formula: (1-0.046)*(1+0.013)*(1+0.003)-1
Overall
rate level change: -3.1%.
Formula: (1-0.046)*(1+0.013)*(1+0.003)*(1+0.000)-1
Components
of Premium Level Change
| Experience,
Trend & Benefits |
-4.6%
|
| Loss
Based Expenses |
1.3%
|
| Loss
Costs Change |
-3.4%
|
| Other
Expenses & Taxes |
+0.3%
|
| Premium
Level Change |
-3.1%
|
| Change
in Expense Constant Offset |
0.0%
|
| Rate
Level Change |
-3.1%
|
|
|
Average
Change by Industry Group
|
Avg.
Rate
|
%
|
Range
of Swing Limits
from Previous Rates
|
|
| Manufacturing |
$2.40
|
-5.2%
|
+20
to -30%
|
| Contracting |
$4.32
|
-2.3%
|
+23
to -27%
|
| Office/Clerical |
$0.28
|
-3.9%
|
+21
to -29%
|
| Goods
& Services |
$1.98
|
-1.7%
|
+23
to -27%
|
| Miscellaneous |
$4.04
|
-1.5%
|
+24
to -26%
|
| All
Classes Average |
$1.47
|
-3.1%
|
|
|
Source:
Tech Supplement, Appendix B-II(5)
Other
Changes:
-
Implied
Loss Cost Multiplier (LCM): 1.364 (1/Target Cost
Ratio)
-
Executive
officer weekly payroll:
-
Minimum
increased from $319 to $336 ($17,472 annually)
-
Maximum increased
from $2,500 to $2,700 ($140,400 annually)
-
Sole
proprietor, partner, LLC member who elect coverage:
-
Expense
constant the same at $250
-
Medical/Indemnity
split: 73%/27%
Source:
Tech Supp Exhibits I-A & I-B, line 15 avg,
2003 & 2004 years, and Exhibit I-C, line
3; developed to ultimate & projected to
midpoint of policy year 2007
Loss
Ratios
|
Indemnity
|
Medical
|
Total
|
|
17%
|
39%
|
56%
|
Policy
year 2004 developed to ultimate at designated
statistical reporting level
Source: Tech Supp Appendix A-III, Section B
|
Target
Cost Ratio
|
Overhead
|
Total
|
|
73.3%
|
26.7%
|
100.0%
|
Tech
Supp Exhibit II-A, line 7
The
target cost ratio is the portion of premium
that funds loss and loss adjustment expense
(LAE). The complement of that is for funding
overhead provisions: production expenses, general
expenses, taxes, and profit & contingencies.
Advisory
Rate Filing Effective January 1, 2006
(overall indications received by IDOI
on 09/26/2005, and class rate pages on 10/17/2005)
(stamped "FILED" on 10/31/05)
To
view the January 1, 2006 Rate Filing Document (PDF)
>Click
Here<
Full
filing of advisory loss costs, advisory rates and
rating values for both voluntary and assigned risk
business effective January 1, 2006 for new and renewal
policies.
Summary
Overall
premium level change: +2.2%.
Formula: (1+0.021)*(1-0.000)*(1+0.001)-1
Overall
rate level change: +1.9%.
Components
of Premium Level Change
| Experience,
Trend & Benefits |
+2.1%
|
| Loss
Based Expenses |
0.0%
|
| Loss
Costs Change |
+2.1%
|
| Production
Expenses & Taxes |
+0.1%
|
| Premium
Level Change |
+2.2%
|
| Min
Prem Multiplier & Max Min Prem |
-0.3%
|
| Rate
Level Change |
+1.9%
|
|
|
Average
Change by Industry Group
|
Avg.
Rate
|
%
|
Range
of Swing Limits
from Previous Rates
|
|
| Manufacturing |
$2.52
|
0.7%
|
+26
to -24%
|
| Contracting |
$4.33
|
3.1%
|
+28
to -22%
|
| Office/Clerical |
$0.29
|
3.4%
|
+28
to -22%
|
| Goods
& Services |
$2.00
|
1.8%
|
+27
to -23%
|
| Miscellaneous |
$3.94
|
1.7%
|
+27
to -23%
|
| All
Classes Average |
$1.50
|
1.9%
|
|
|
Source:
Tech Supplement, Appendix B-II(5)
Other
Changes:
-
Implied
Loss Cost Multiplier (LCM): 1.357
-
Executive
officer weekly payroll:
-
Minimum
remains the same at $319 ($16,588 annually)
-
Maximum
remains the same at $2,500 ($130,000 annually)
-
Sole
proprietor, partner, LLC member who elect coverage:
-
Expense
constant the same at $250
-
Medical/Indemnity
split: 72%/28%
Source:
Tech Supp Exhibits I-A & I-B, line 28 avg, 2002
& 2003 years, and Exhibit I-C, line 3; developed
to ultimate & projected to midpoint of policy
year 2006
Loss
Ratios
|
Indemnity
|
Medical
|
Total
|
|
19%
|
40%
|
59%
|
Policy
year 2003 developed to ultimate at designated statistical
reporting level
Source: Tech Supp Appendix A-III, Section B
|
Target
Cost Ratio
|
Overhead
|
Total
|
|
73.5%
|
26.5%
|
100.0%
|
The
target cost ratio gives a 0% change indication from
the previous year to determine if rates are adequate
on a standard premium basis. The target cost ratio
is the portion of premium that funds loss and loss
adjustment expense (LAE). The complement of that
is for funding overhead provisions: production expenses,
general expenses, taxes, and profit & contingencies.
January
1, 2005
(advisory rate filing stamped "filed"
on 10/29/2004)
To
view the January 1, 2005 Rate Filing Document (PDF)
>Click
Here<
Full
filing of advisory loss costs, advisory rates and rating
values for both voluntary and assigned risk business
effective January 1, 2005 for new and renewal policies.
Overall
premium level change: +3.2%.
Formula: (1+0.03)*(1-0.006)*(1+0.008)-1
Overall
rate level change: +3.2%.
Components
of Premium Level Change
| Experience,
Trend & Benefits |
+3.0%
|
| Loss
Based Expenses |
-0.6%
|
| Other
Expenses & Taxes |
+0.8%
|
| Expense
Constant Offset |
0.0%
|
|
Source:
Tech Supplement, Appendix B-II(5)
|
Average
Change by Industry Group
|
Range
of Swing Limits
from Previous Rates
|
Avg.
Rate
|
|
| Manufacturing |
+3.3%
|
+28
to -22%
|
$2.49
|
| Contracting |
+1.8%
|
+27
to -23%
|
$4.20
|
| Office/Clerical |
+0.3%
|
+25
to -25%
|
$0.28
|
| Goods
& Services |
+4.1%
|
+29
to -21%
|
$1.96
|
| Miscellaneous |
+5.0%
|
+30
to -20%
|
$3.89
|
| All
Classes Average |
|
|
$1.46
|
|
Other
Changes:
Note: Revision of rates for 8 class codes (1655, 3085, 3365,
5472, 5473, 7601, 7720, and 8107) were "FILED" on 09/21/2005
and effective 01/01/2005. Online rate pages were updated as
of 12/22/2005.
-
Implied Loss Cost Multiplier (LCM): 1.359
-
Executive
officer weekly payroll:
-
Minimum
increased from $307 to $319 ($16,588 annually)
-
Maximum
remains the same at $2,500 ($130,000 annually)
-
Sole
proprietor, partner, LLC member who elect coverage:
-
Expense
constant the same at $250
-
Medical/Indemnity
split: 65%/35%
-
Source:
Tech Supp Exhibit I-A, lines 8 & 20, 2001& 2002
years
Loss
Ratios
|
Indemnity
|
Medical
|
Total
|
|
20%
|
41%
|
61%
|
Policy
year 2002 developed to ultimate at designated statistical
reporting level
Source: Tech Supp Appendix A-III, Section B
|
Target
Cost Ratio
|
Overhead
|
Total
|
|
73.6%
|
26.4%
|
100.0%
|
For
2005, the target cost ratio is 73.6%. The target cost
ratio gives a 0% change indication from the previous
year to determine if rates are adequate on a standard
premium basis. The target cost ratio is the portion
of premium that funds loss and loss adjustment expenses
(LAE). The complement of that (26.4%) is for funding
overhead provisions: production expenses, general
expenses, taxes, and profit & contingencies.
January
1, 2004
(advisory rate filing deemed approved as
of 11/16/2003)
Full
filing of advisory loss costs, advisory rates and rating
values for both voluntary and assigned risk business effective
January 1, 2004 for new and renewal policies.
Overall
premium level change: -1.8%.
Formula: (1-0.02)*(1+0.002)-1
Overall
rate level change: -1.8%.
Components
of Premium Level Change
| Experience
|
-2.0%
|
| Trend |
0.0% |
| Benefits |
0.0% |
| Loss
Adjustment Expense |
0.0%
|
| General
Expense |
+0.2%
|
| Expense
Constant Offset |
0.0%
|
|
Source:
Tech Supplement, Appendix B-II(5)
|
Average
Change by Industry Group
|
| |
