The method and steps for calculating Indiana workers compensation insurance premium.

Premium in Indiana is calculated per the algorithm contained in NCCI's Basic Manual-2001 Edition-Indiana. The algorithm is reviewed as part of the annual rate filing and approved by the Indiana Department of Insurance.

Step-by-Step Explanation

The following provides an explanation of how to calculate total estimated premium based on the algorithm.

1. For each class code: payroll X rate / 100 = estimated manual premium

“Subject premium” is the audited manual premium.  It does not include premium discount, any surcharges, schedule rating, etc.  We use it to determine eligibility for experience rating. It doesn’t mean much if you are trying to determine the actual policy premiums paid for that term.

Employer's liability increased limits

Indiana deductible or co-insurance premium credit or debit

Rate deviation

Waiver of subrogation

4. Multiply total subject premium by the experience modification to get total modified premium

Premium not subject to experience rating:​

Assigned risk surcharge (30% for policies with premium in excess of \$2,750)

Aircraft passenger seat surcharge

Schedule Rating

Premium discount (applied to standard premium defined in Basic Manual Rule 3.A.19).

Coal mine disease charge

Expense constant

Terrorism and catastrophe surcharges

Second Injury Fund Surcharge

Below you will find the algorithms for Indiana's Assigned Risk and Voluntary Workers Compensation markets.

 Effective 01 Jan 2020 12:00:01 View Previous Updates                         January 01, 2015                         January 01, 2012                         January 01, 2011                         December 31, 2009                         September 01, 2008                         January 01, 2008                         January 01, 2006                         January 01, 2005                         January 01, 2003                         December 01, 2002                         July 01, 1999

### Indiana Assigned Risk Workers Compensation Premium Algorithm

The following algorithm provides the framework for premium charges and credits. Where not specified, the premium base would be the result from the prior line.

MANUAL PREMIUM[(PAYROLL / 100) * RATE]
+Supplementary Disease (foundry, abrasive, sandblasting)[(SUBJECT PAYROLL / 100) * DISEASE RATE]
+USL&H Exposure for non-F classification codes[(SUBJECT PAYROLL / 100) * (RATE * USL&H FACTOR)]
+Waiver of Subrogation factor[% applied to the portion of Total Manual Premium where waiver is applicable]
+Employers Liability (E/L) increased limits factor[% applied to Total Manual Premium]
+Employers Liability increased limits charge[Balance to E/L increased limits minimum premium]
Small Deductible Coinsurance credit[% applied to Total Manual Premium]
xExperience Modification (Exp Mod)
+Supplemental Disease Exposure (Asbestos[NOC])[]
+Balance to Minimum Premium (State Act)[Balance to minimum premium at Standard Limits]
xAssigned Risk Surcharge[A 30% surcharge is applicable to the premium in excess of
\$2,750 of the standard premium, subject to audit]
+Coal Mine Disease Charge[Underground, surface, surface auger]
+Expense Constant
+Terrorism[(PAYROLL / 100) * TERRORISM VALUE]
+Catastrophe (other than Certified Acts of Terrorism)[(PAYROLL / 100) * CATASTROPHE (OTHER THAN CERTIFIED ACTS OF TERRORISM) VALUE]
+Second Injury Fund Surcharge
TOTAL AMOUNT DUE

[NOC= Not Otherwise Classified.

[Nonratable Element Premiums generated by nonratable portion of manual rate are subject to all applicable premium elements applied to the policy, however, not subject to experience rating or NCCI’s Loss Sensitive Rating Plan.

 Note: For short rate cancellations, short rate percentage/short rate penalty premium factor is subject to experience rating, included in Total Subject Premium, and applied prior to Experience Modification.

NOTICE: Although the formatting of this online manual, including any state exceptions, may differ from the hard copy, the content is identical.

 Effective 01 Jan 2015 12:00:01 View Previous Updates                         December 31, 2009                         September 01, 2008                         January 01, 2008                         January 01, 2006                         January 01, 2005                         December 20, 2002                         July 01, 2001

### Indiana Workers Compensation Premium Algorithm

The following algorithm provides the framework for premium charges and credits. Where not specified, the premium base would be the result from the prior line.[*]

MANUAL PREMIUM[(PAYROLL / 100) * RATE]
+Supplementary Disease (foundry, abrasive, sandblasting)[(SUBJECT PAYROLL / 100) * DISEASE RATE]
+USL&H Exposure for non-F classification codes[(SUBJECT PAYROLL / 100) * (RATE * USL&H FACTOR)]
+Waiver of Subrogation factor[**][% applied to the portion of Total Manual Premium where waiver is applicable]
+Employers Liability (E/L) increased limits factor[% applied to Total Manual Premium]
+Employers Liability increased limits charge[Balance to E/L increased limits minimum premium]
+Employers Liability increased limits factor (Admiralty, FELA)[Factor applied to the portion of Manual Premium where Admiralty/FELA coverage is applicable]
+Employers Liability/Voluntary Compensation flat charge[Coverage in Monopolistic State Funds]
Small Deductible credit[% applied to Total Manual Premium]
xExperience Modification (Exp Mod)
xSchedule Rating factor (1 – SR credit %) or (1 + SR debit %)
+Supplemental Disease Exposure (Asbestos[NOC])[]
+Balance to Minimum Premium (State Act)[Balance to minimum premium at Standard Limits]
+Coal Mine Disease Charge[Underground, surface, surface auger]
+Expense Constant
+Terrorism[(PAYROLL / 100) * TERRORISM VALUE]
+Catastrophe (other than Certified Acts of Terrorism)[(PAYROLL / 100) * CATASTROPHE (OTHER THAN CERTIFIED ACTS OF TERRORISM) VALUE]
+Second Injury Fund Surcharge
TOTAL AMOUNT DUE

[**Premium charges established for Waiver of Subrogation are not filed by ICRB for the voluntary market.

[NOC= Not Otherwise Classified.

[Nonratable Element Premiums generated by nonratable portion of manual rate are subject to all applicable premium elements applied to the policy, however, not subject to experience rating or retrospective rating.

 Note: For short rate cancellations, short rate percentage/short rate penalty premium factor is subject to experience rating, included in Total Subject Premium, and applied prior to Experience Modification.

[*The above rating method would be used in absence of independent carrier filings.

NOTICE: Although the formatting of this online manual, including any state exceptions, may differ from the hard copy, the content is identical.