Experience Rating - Rating Effective Date (RED)


The Rating Effective Date (RED) appears on a risk's experience rating worksheet.  It is the earliest date that a specific modification is applied to a policy.

 

The RED may differ from the policy effective date for reasons including, but not limited to:

  • Short-term policies
  • Cancellations
  • Gaps in coverage
  • Changes in ownership or combinability status
  • Multiple policy effective dates Interstate operations
  • A policy that is longer than one year and 16 days
  • Late receipt of current policy information by the rating organization

Note:  Wrap-up policies are not used to determine the RED.

 

Rating Effective Date Determination Table

 

If the risk is…Then the rating effective date is…

A single policy intrastate or interstate risk, or

A multiple policy intrastate or interstate risk with all policies having the same effective date



The effective month and day of the most recent full-term policy in effect and each policy thereafter unless the date is changed due to a reason listed above.
A multiple policy intrastate risk with policies having different effective datesThe effective month and day of the most recent full-term policy in effect with the largest amount of estimated standard premium.

A multiple policy interstate risk with policies having different effective datesThe effective month and day of the most recent full-term policy in effect for the state with the largest amount of estimated standard premium.

 

An experience rating modification will apply for:

  • No less than three months, except for those impacted by changes in ownership and combinability status according to Rule 3
  • No more than 15 months
  • The experience rating modification applies for the full term of the policy if the policy begins on the RED or within three months after the RED.
  • If a policy begins more than three months after the RED, the following procedure applies:
    1. The current experience rating modification applies to the new policy until the date the modification expires.
    2. A renewal experience rating modification applies to the new policy until the date the policy expires.
    3. A new RED may be established.  Usually, this will be the date 12 months after the effective date of the new policy.

Example:

 

 

 

07/01/2018                                      07/01/2019                                     

 

 

 

 

 

 

 

 

 

 

    01/01/2019                                               01/01/2020  one year

 New policy date

 

 

Short term mod

7/1/19  1/1/20

 

7/1/18 = rating effective date

7/1/19 = next rating effective date (policy effective one year)

1/1/19 = new, rewritten policy

1/1/20 = new rating effective date, new mod effective date (policy effective one year)

 

7/1/19 mod is short termed to expire on 1/1/20, concurrent with new rating effective date

 

A policy subject to this rule should have attached to it the ERM Factor Revision Endorsement (WC 00 04 25).​


 

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