Transfer of experience mod upon dissolvement of business is not always possible
When a partnership dissolves, it is not alwasy possible to transfer experience to the one partner that is leaving the business. If the prior experience of the partnership cannot be split, it is not transferred. That is, neither partner gets the experience carried over to its new solely owned operation and both new entities start with a unity (1.00) mod.
The Statistical Plan Manual, Rule 3– Ownership Changes and Combination of Entities
E. Treatment of Experience
|If the single or multiple entity risk . . .||And the purchaser . . .||Then . . .|
|Disposes of part of its operations, and Otherwise continues to operate its business, and Its statistical data has been combined on a single policy, and The insurance provider cannot furnish the rating organization with the appropriate experience to provide for transfer of the data to the purchaser||Does not have any experience, or Has experience but does not qualify for experience rating||A unity factor (1.00) will apply to the purchaser’s policy until qualifying experience is developed. All experience developed prior to the sale remains in future experience rating modification(s) of the seller.|
|Is an experience rated risk||The purchaser’s experience rating modification will continue to apply. Any experience developed by the purchased entity(ies) after the sale will be included in the future experience rating modification(s) of the purchaser. All experience developed by the purchased entity(ies) prior to the sale remains in the future experience rating modification(s) of the seller.|