Assigned Risk: Pool Assessment & Reapportionment

Explanation of the ICRB assessment and reapportionment process.;

Assessment Procedure

The ICRB charges its member insurance companies for its operating expenses each year. The legal authority to assess is found in Indiana Code § 27-7-2-9, Apportionment of costs – Review – Decision, which begins “The charges and expenses incident to the establishment and operation of the bureau shall be borne equitably and without discrimination among the members of the bureau.”

The ICRB charges its members based on each member’s proportional share of premium writings.

Reapportionment Procedure

The purpose of the reapportionment process is to reconcile direct written premium with actual operating expenses for a particular year. In other words, reapportionment is an even-up process; it matches premium to expenses for a specified period of time.

The process begins with identifying exactly how much each carrier paid, its actual direct written premium for the year and then a calculation to determine what it should have paid. The ratio used to determine each carrier’s share of expenses is derived by taking the actual operating expenses total and dividing it by the direct written premium total for Indiana. This nine digit ratio is then applied to each carrier’s direct written premium. Carriers that paid more than their share are given a credit and carriers that paid less than their share will be billed the additional amount.

The total operating expense is taken from the ICRB Financial Statements and Independent Auditors Report for the appropriate year. The item line is the Total Management and General Expenses amount minus interest earned and the revenue collected from the minimum assessment of member carriers.

If a carrier overpaid, the credit is applied to the 2nd quarter assessment and if a credit balance still remains, a check is issued to the carrier in the month of June.

The ICRB assesses carriers based on direct written premium on an individual company basis.