Premium rates

Premium rates over bulk railcar 20 billion annual sales 054 3210 UMd bv ovef 23,000 plants... 

The overtime premium rate is one and one-half times the employee s regular rate, unless otherwise specified. 

The National Council on Compensation Insurance (NCCI), an actuarial organization, sets basic premium rates for most states. NCCI adjusts rates to keep up with changes in compensation laws. Each state has its own rate table or book. 

Tables include premium rates for many kinds of operations or work activities. Rates for each state reflect different risks, and claim histories are accounted for in setting rates.

Depending on provisions in apphcable compensation laws, there are multiple methods that may set premium rates for an insurer s customers. The key methods are manual rating, schedule rating, experience rating (prospective and retrospective), fixed rates, and premium discounts. 

Schedule Rates In the earlier days of workers compensation, employers could receive a percentage reduction in the premium rates by engaging in certain hazard reduction activities. Those activities will appear in a schedule. This technique is no longer used. A major reason is the difficulty and expense in monitoring compliance. 

Competitive Premium Rates Until recently, workers compensation premiums were the same for each program for each insurance company. All insurers quoted rates firom the same manual rate book. Insurance companies used supporting services for clients to create a competitive edge. Recently, some states have started competitive premium rates in which insurance companies can set premiums on their own. Programs operated this way expect to produce lower rates, but often produce reduced loss control services. 

Chapter 6 discussed methods for setting workers compensation insurance premium rates. In some methods the cost to the insurer for claims made against a policy determine future premium rates. Insurance rates for liability or other business protections also influence premiums. Some people buying auto and home insurance encounter this after an accident or claim. Incident records and reports may also help determine the value of a loss. 

All premium rates are based on the basic principles of insurance ... 

Iceland. The state-owned Iceland Catastrophe Insurance (ICI), which was established in 1975 after the 1973 Mt. Heimaey volcanic eruptions, provides catastrophe coverage for natural hazards including volcanic eruptions, earthquakes, landslides, snow avalanches, and floods. The participation is compulsory, incidental to fire insurance, and covers direct loss to buildings, content, and lifelines. The deductible is 5 % for each loss. The premium rate for properties and content is 0.025 %, while that for lifelines is 0.02 %. The ICI is liable up to 1 % of the total insured capital if this amount is exceeded, the claim repayments are proportionally reduced. 

Taiwan The government-endorsed Taiwan Residential Earthquake Insurance Fund (TREIF) operates the earthquake insurance program in Taiwan. TREIF was established in 2002 in the aftermath of the 1999 Chi-Chi earthquake. The policy is incidental to fire insurance and its purchase is compulsory. The insurance covers damage and loss of residential properties due to earthquakes. The upper limit of the repayment per household is TW 1.2 million for residential properties and TW 180,000 for cmitingent expenses, respectively. The premium rate is 0.122 %. The total amount of the payable claims is TW 60 billion. 

To alleviate the effects due to moral hazard and adverse selection, introducing pro rata share of the risks and differentiating the rates according to physical parameters related to seismic hazard and vulnerability of the covered properties (e.g., geographical region, structural type, built year, and number of stories) are useful (see Table 1). Other proactive ways to avoid adverse selection and encourage physical DRR measures are to implement an effective incentive scheme in determining insurance premium rates (e.g., Japanese insurance system). 

ASLRRA reports that there are general industry-wide premium rates that apply to railroads who are first-time customers of an insurance company. However, railroads can then try to negotiate a lower premium based on their experience of claims, and the safety management practices that they have put in place. Insurance companies employ their own assessors to validate such arguments. This process of setting individual premiums is aided by the practice that railroads tend to purchase their own insurance and do not seek group purchase in cooperation with other railroads (GAO, 1996). 

Provided that any bonus payable shall not be less than the statutory minimum fixed by the Premiums Committee in accordance with the New South Wales Workers Compensation Fixed Insurance Premium Rates and Fixed Loss Ratio Scheme 1945 as amended from time to time. 

Risk free rate of return Risk premium rate Return rate... 

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