Section 4 - Retrospective Rating Plan

I. INTRODUCTION

The rules contained in this manual apply only to Workers Compensation and Employers Liability Insurance
when written either alone or in combination with other commercial casualty insurance. Refer to the
Retrospective Rating Plan issued by the Insurance Services Office for rules that govern the other
commercial casualty insurance.

GENERAL EXPLANATIONS
1. PLAN IS OPTIONALThe application of this Plan is optional and may be used only upon election by the insured
  and acceptance by the insurance carrier.
2. OBJECT OF THE PLANThis plan adjusts the premium for the insurance to which it applies on the basis of losses
  incurred during the period covered by that insurance. The intent is to charge a premium
  which reflects those losses.
3. LOSS CONTROL INCENTIVE IN USE OF THE PLANThe Plan provides an incentive to the insured to control and reduce losses because the
  retrospective premium will be the result of losses during the rating period.
4. COST-PLUS FEATURE OF THE PLANThe cost-plus characteristics of this plan exist because the retrospective premium for a
  rating period is based on incurred losses.
5. EXPERIENCE RATING PLAN MANUALRetrospective rating is an independent option and it is not a substitute for experience rating.
6. RISKS NOT SUBJECT TO EXPERIENCE RATINGFor risks not subject to experience rating, retrospective rating premium is based on manual rates.
7. RISKS OPERATING IN MORE THAN ONE STATEThis Plan may be applied on an intrastate or interstate basis.
8. PREMIUM DISCOUNTAny standard premium under this Plan is not subject to premium discount provisions.
9. SCHEDULE (Y) AND SCHEDULE (X) EXPENSE RATIO TABLESThe Plan includes tables of expense ratios used by each company.
  
  NOTE: Schedule (Y) and (X) tables represent stock and non-stock systems respectively.
10. INCREASED LIMITS FOR EMPLOYERS LIABILITYIf the policy provides increased limits, such premium and losses may be subject to the Plan.