Minimum premium rule, recent minimum premiums by year, minimum premium formula.
A minimum premium charge is the least amount that an insurance company will charge for writing a one-year assigned risk policy.
The minimum includes everything. So you calculate the class code premium, add the 30% assigned risk surcharge, and add the expense constant. If they all add up to less than minimum, then the carrier charges the minimum.
The minimum premium calculation: class rate X minimum premium multiplier + expense constant.
The minimum premium multiplier (MPM) and expense constant are updated with each annual advisory rate filing and can be found in the Technical Supplement, Indiana Summary, part IV. Summary of Miscellaneous Changes.
Note that some minimum premium policies can be canceled pro-rata. Refer to Basic Manual Rule 3.A.3.
Three Year Fixed Rate Policy
Minimum premium for a three year fixed rate policy is defined in the Basic Manual Rule 3.B.2.
Balance to Minimum Premium Calculation
Balance to minimum premium = highest minimum premium + increased limits minimum charge – (total modified premium + ARAP surcharge +merit rating credit/debit + nonratable premium) – coal mine disease charge – expense constant
*Note that some elements may not apply to a specific policy, example- Coal Mine Disease Charge.