What information is needed to calculate premium for a given risk?
What do rating manual rules contain?
Contains qualitative information which helps user with rating algorithms
Summary of available policy forms
Premium determination considerations
Classification of risk
What do Rate Pages contain?
Contains the numbers needed to calculate premium
E.g., base rates, rating factors, fees
What is a base risk?
Specific risk characteristic selected by insurer
May be most common or selected based on marketing
(e.g. for ML discount, if it is the base, those that don't qualify get a rate increase. Better image to have it as a discount if they qualify)
Base rate is applicable
What are Rating Algorithms and what type of items do they include?
Provides the detail instructions to calculate the policy premium
1. Uses information in rules and rate pages
2. Includes such items as: Order to consider rating variables, How rating variables are applied (e.g., multiplicative, additive), Maximum and minimum premiums (or sometimes maximum discount or surcharge, Rounding instructions
What are the Underwriting Guidelines?
Company-specific criteria for acceptance or placement of a risk