Post-Reform Ratemaking: Adjustment of Pre-Reform loss Post-Reform LOS Development Patterns
نویسنده
چکیده
Objecrive Ratemaking data, particularly loss development pattems, for a state which has enacted major workers compensation reform is not available for a number of years following reform. As a result adjustment, or actuarial judgment, needs to be applied to historical pre-reform data to reflect expected post-refotm loss development pattems. The adjusted pattem can then be incorporated into traditional ratemaking methodolgies.This paper offers a model to calculate actuarially appropriate adjustments for this situation. Background Colorado enacted workers compensation reform SB 218 effective July 1, 1991. This reform resulted in a savings of 32.8% in indemnity loss costs based on the initial pricing by National Council On Compensation Insurance (NCCI). The bulk of the quantitied savings came fiom Permanent Total and Permanent Pardal benefits. The law memo in the June 27, 1991 Colorado fXng outlines the details of SB 218.
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