Section V - Glossary

Glossary

Term	Definition
PCRB Data Card	PCRB Data Cards provide the risk name, location, PCRB file number, authorized classification(s) and, if applicable, the risk’s experience modification for a minimum of one year. Risks approved for the Pennsylvania Construction Classification Premium Adjustment Program and any other applicable credit program will be shown on these data cards.
PCRB Loss Costs	Dollar amounts per unit of exposure attributable to the payment of losses under workers compensation and employers liability coverages, filed by the PCRB based on the aggregate experience of all PCRB members and approved by the Pennsylvania Insurance Commissioner.
PCRB Rating Values	All parameters filed by the PCRB and approved by the Pennsylvania Insurance Commissioner, and which are used either mandatorily or by option of carriers for purpose of pricing workers compensation and employers liability coverages. Such PCRB rating values include PCRB Loss Costs, experience rating plan values such as Expected Loss Cost Factors, Credibility, Maximum Value of One Accident, and Credibility Weighted Maximum Value Charge, retrospective rating plan values such as the Table of Expected Loss Ranges, Excess Loss Pure Premium Factors, Retrospective Pure Premium Development Factors, and expense parameters applicable to USL&HW coverages such as Premium Discounts, Expected Loss Ratio, Expense Ratios, Tax Multipliers and Loss Conversion Factors.
Carrier Rate	The amount per unit of exposure which an insurance carrier charges for workers compensation and employers liability insurance.
Carrier Rating Value	All parameters used by carriers for purposes of pricing workers compensation and employers liability insurance coverages. Such parameters may be either PCRB Rating Values adopted by a carrier for its own use or values independently determined by a carrier.
Contract Medical	An agreement between an insurance carrier and one or more doctors, which specifies that in return for stipulated sum of money, the doctor(s) will provide medical services for treatment of occupational injuries sustained by employees of a particular risk being insured by the carrier.
Correction Report	A report, which is required to correct an error of any kind on a previously filed report.
Cumulative Injury	An injury, which results in a disability or death and is not traceable to a definite compensable accident occurring during the employees present or past employment. The injury is understood to have occurred from and has been aggravated by an employment-related repetitive activity. For example, a cement mason, carpet installer or tile man presents a claim for injury to the knee caused by repetitive bending and kneeling on the job.
Employers Liability	If an injured employee is not covered under any workers compensation law, he or she may seek recovery by suing the employer under employers liability.
Expense Constant	A premium charge which may apply to a policy in addition to the premium inclusive of loss constants. The expense constant covers expenses such as those issuing recording and auditing, which are common to all workers compensation policies regardless of size.
Experience Modification	An adjustment to premium for a given risk merited by loss ratios that are higher or lower than expected.
Rated Risk	A risk, which has an experience modification.
Non-Rated Risk	A risk, which has no experience modification.
Exposure	The extent of exposure to loss as measured by payroll, or, for per capita classes, man-weeks.
Loss Constant	An amount, which may be added to the premium on policies on small risks to compensate for their higher loss ratio.
Loss Cost	Dollar amounts per unit of exposure attributable to the payment of losses under workers compensation and employers liability coverages. Loss costs may be developed either by the PCRB based on the aggregate experience of all PCRB members or may be established by individual carriers based on their own supporting information.
Loss Ratio	The ratio of losses to premiums.
Man-Year	One employee working for one year. For example, an employee working for one year is insured for one man- year. An employee working for nine months is insured for .8 man-years.
Merit Rating	The plan is intended to grant premium discounts or assess premium surcharges to employers, which do not qualify under the uniform Experience Rating Plan.
Minimum Premium	The lowest premium amount for which a single risk can be insured for a policy period. Minimum premiums are not subject to experience modifications or rate deviations.
Non-Ratable Element	A portion of the rating value, which is not subject to experience or retrospective rating.
Occupational Disease	Occupational disease — is any abnormal condition caused be repeated exposure extending over a period of time to a disease producing agent or agents present in the workers’ occupational environment resulting in disability or death, which is not traceable to a definite compensable accident occurring during the employee’s present or past employment. –For example, a granite worker presents a claim for the occupational disease of silicosis due to exposure to the disease agent silica.
Per Capita Classification	A classification where the exposure base is the number of employees rather than payroll.
Premium Discount	For policies with a total standard premium in excess of a specified amount, the premium discount recognizes that the relative expense of issuing and servicing larger premium policies is less than for smaller premium policies.
Provision for Claim Payment	Historical aggregate losses projected through development to their ultimate value and through trending to a future point in time, but excluding all loss adjustment or claim management expenses, other operating expenses, assessments, taxes, and profit or contingency allowances. In this Plan, the term “loss cost” is synonymous with “provision for claim payment.”
Rating Value	A parameter or number used in pricing workers compensation or employers liability insurance coverages. Rating values may be established by the PCRB or by individual carriers. Where individual carriers have established rating values different from those of the PCRB, the carrier’s values supercede those of the PCRB for purposes of that insurer’s policies.
Reinsurance	Acceptance by an insurer (called a reinsurer) of all or part of the risk of loss of another insurer.
Scheduled Indemnity	Benefits determined from a schedule of awards based on injury as required by law.
Schedule Rating Plan	The loss and/or expense components of an insured risk’s premium may, at the option of the underwriting carrier, be adjusted in accordance with provisions of this plan to reflect defined characteristics of the risk which, in the sole judgment of the underwriting carrier, are not adequately reflected in prior experience of the insured risk.
Second Injury Fund	When a previously injured worker returns to work and is injured again in such a way that the combined effects of the injuries constitutes a more serious injury (and thus has higher benefits) than the two injuries considered separately, the difference in benefits is paid by the Second Injury Fund. For example, if a worker is injured and loses an arm, then returns to work and is subsequently re-injured losing his other arm, the second injury fund will pay the difference between the benefits for the loss of both arms and the combined benefits when the loss of each arm is considered separately.
Subrogation	A recovery action in which losses incurred by a carrier due to the injury of an employee are reimbursed either in part or in whole by a third party deemed primarily responsible for the injury.
Subsequent Report	A report, which updates the loss information and is filed as of the second, third, fourth, fifth, sixth, seventh, eighth, ninth and/or tenth valuation date. (Refer to Section III, Item A.1. for valuation dates)
Supplemental Non-Ratable Loading	A supplement to be added to the rating value for certain risks within a classification, which have a hazard, not shared by all members of the classification. The supplemental loading is not subject to experience or retrospective rating.
Vocational Rehabilitation	The costs involved in retraining an injured worker to return to work at the same or a different job.
Voluntary Compensation Insurance	An employer may purchase a voluntary compensation policy to insure against claims filed by employees who are not covered under any workers compensation law. Such insurance provides benefits similar to those provided under workers compensation.