§ 27-7.1-1.1 - Definitions. - Rhode Island Statutes

SECTION 27-7.1-1.1

   § 27-7.1-1.1  Definitions. – The following definitions shall apply for purposes of this chapter:

   (1) "Accepted actuarial standards" means the standardsadopted by the casualty actuarial society in its statement of principlesregarding property and casualty insurance ratemaking, and the standards ofpractice adopted by the actuarial standards board.

   (2) "Advisory organization" means any entity, including itsaffiliates or subsidiaries that assists insurers in ratemaking-relatedactivities, and is licensed in accordance with the provisions of § 27-9-22.

   (3) "Classification system" means the plan, system, orarrangement for recognizing differences in exposure to hazards amongindustries, occupations of operations of insurance policyholders.

   (4) "Department" means the department of business regulation.

   (5) "Developed losses" means losses (including lossadjustment expenses) adjusted using standard actuarial techniques, to eliminatethe effect of differences between current payment or reserve estimates andthose which are anticipated to provide actual ultimate loss (including lossadjustment expense) payments.

   (6) "Director" means the director of the department ofbusiness regulation.

   (7) "Expenses" means a workers' compensation insurer'sdetermination of the expenses, other than loss expenses and loss adjustmentexpenses, associated with writing workers' compensation insurance.

   (8) "Experience rating" means a rating procedure utilizingpast insurance experience of the individual policyholder to forecast futurelosses by measuring the policyholder's loss in the same classification toproduce a prospective premium credit, debt or unity modification.

   (9) "Insurer" means any person writing coverage under theworkers' compensation laws of this state.

   (10) "Loss trending" means any procedure for projectingdeveloped losses to the average date of loss for the period during which thepolicies are to be effective, including loss ratio trending.

   (11) "Prospective loss costs" means historical aggregatelosses and loss adjustment expenses, including all assessments that areloss-based, projected through development to their ultimate value and throughtrending to a future point in time, ascertained by accepted actuarialstandards. Prospective loss costs do not include provisions for profit orexpenses other than loss adjustment expenses.

   (12) "Pure premium rate" means that portion of the rate thatrepresents the loss cost per unit of exposure including loss adjustment expense.

   (13) "Rate or rates" means rate of premium, policy andmembership fee, or any other charge made by an insurer for or in connectionwith a contract or policy of workers' compensation and employer's liabilityinsurance, prior to application of individual risk variations based on loss orexpense considerations, and does not include minimum premiums.

   (14) "Special assessments" means insurers' insolvency fundassessments, workers' compensation administration fund assessments, capitalassessments for the state compensation insurance fund, and other similarassessments. Special assessments shall not be considered as either expenses orlosses, but shall be treated as separate costs by insurers' and shall beassessed on their policyholders in accordance with rules set forth by anadvisory organization and approved by the director.

   (15) "Statistical plan" means the plan, system, orarrangement used in collecting data.

   (16) "Supplementary rating information" includes any manualor plan of rates, classification, rating schedule, minimum premium, policy fee,rating rule, underwriting rule, statistical plan and any other similarinformation needed to determine the applicable premium for an individualinsured and not inconsistent with the purposes of this act, as prescribed bythe director.

   (17) "Supporting information" means (i) the experience andjudgment of the filer and the experience or data of other insurers or advisoryorganizations relied upon by the filer; (ii) the interpretation of any otherdata relied upon by the filer; and (iii) descriptions of methods used in makingthe rates, and any other information required by the director to be filed.