A program to encourage carriers to remove (or take out) employers from the residual market.
The Take-Out Credit Program is a filed program in Indiana. It became effective January 1, 1992. The program encourages carriers to remove (or take out) employers from the residual market. It allows a carrier to obtain credits against its Pool participation base by writing assigned risks voluntarily.
For every dollar in premium removed, the carrier gets a dollar credit against its Pool participation base. The employer must stay out of the residual for at least one policy year. The carrier can earn the credit for up to three years. The credits are applied against a carrier’s calendar year voluntary premium. Calendar year voluntary premium is used as the basis for the apportionment of the results of the residual market.
To receive take-out credits carriers must submit an annual request to ICRB’s vendor NCCI within the first quarter of each year.
In 2004, NCCI implemented an “Automated” Take-Out Credit Program for all workers compensation insurance carriers that are Plan participants. The automation eliminates the need for carriers to manually track and submit eligible policy data on an annual basis to NCCI for credit.