Experience and Schedule Rating

[JasonScandopolous]

Quick question: 2005 # 54 involves both experience and schedule rating. At my company, and strictly from the definition of schedule rating given in W&M, the calc goes like this:

Manual*(exp cred/deb + sch cred/deb).

The sample answer uses exp *sch. Is this another one of those things where it doesnt really matter and the graders arent going to care?

[booyah81]

W/M doesn't show any calculations where you combine the two methods, so I'd just go with that prior exam question and multiply them. Probably another situation where it doesn't matter.

[Vorian Atreides]

It'll depend on the rating plan.

My work with commercial is that the schedule rating is a separate item from the rest of the manual rating plan (which includes the experience rating adjustment); and it's applied multiplicatively.

This is done since any scheduled adjustments has to be clearly documented to support given the particular adjustment (especially if it's a debit). Once you start modifying other rating factors based on this, it can get real messy from a practical and implementation stand point (unless you're hand rating every single policy, which isn't the case for most policies).