Section 4 - Retrospective Rating Plan

Retrospective rating is an insurance pricing system which adjusts the premium for the insurance to which it applies on the basis of losses incurred during the period covered by that insurance. In Pennsylvania a carrier must file with the Pennsylvania Insurance Department such plan rules and rating values as necessary to implement retrospective rating plans for use in writing workers compensation insurance.

The Pennsylvania Workers’ Compensation Act of June 2, 1915, as amended, requires PCRB filings other than United States Longshore and Harbor Workers’ Compensation Act (LHW CA) filings to exclude all expense and profit considerations as well as loss adjustment expenses. Beginning effective December 1, 1993, the PCRB has filed and this Manual includes only selected rating values which are exclusive of expense and profit considerations for coverages other than LHW CA and which are inclusive of such provisions for LHW CA coverage.

For sake of consistency with standard language in retrospective rating plans in use in other jurisdictions selected Pennsylvania retrospective rating plan rating values are identified using terminology common to such other retrospective rating plans. The use of such terminology in this section of the Manual does not change the meaning of words or terms used elsewhere in the Manual nor are differences in precise wording used to describe specific items indicative of any substantive difference between sections. For example, the term “pure premium” used in this section and the term “loss cost” used elsewhere in this Manual are synonymous.

A carrier may file retrospective rating plans which use different and/or additional rating values from those shown in this Manual. In such cases the individual carrier values supersede application of the PCRB values. Information regarding such individual carrier retrospective rating plans must be obtained from those carriers or their authorized representatives.

IMPORTANT NOTES

Selected Retrospective Rating Plan Rating Values
See Section 2 – Rating Values and Classifications of this Manual for values.