NCCI experience rating, which limit rules?

[USTC]

NCCI Experience Rating Plan has so many limit with regard to the actual losses. I am getting a little confused by the SAL, the $5,000 limit for A(primary), and the 30% rule for the medical losses. What is the order to apply those limits?

I am thinking the following, can anybody confirm it?

1. For each claim, apply the SAL(or 2*SAL for claims with 2+ people involved) to get the adjusted A', That is why we have total loss 206K instead of 215K in Question 33-Exam 2002, 111.5K instead of 150K for Q27-Exam 2003.

2. Apply the $5k limit(10K for claims with 2+ people involved) to A' to get the A(primary) and then multiple 0.3 to medical claims.

3. A'-A(primary)=A(excess), again for medical claims, 0.3*[A'-A(primary)]=A(excess).

This hasn't considered disease claims yet.

With regard to the disease claim limit, taking Question 24-Exam96 as an example, why do we use SAL=50,000 instead of the fancy formula , i.e. 3*SAL+1.2*E?
:-?

Thanks.

[frank_exams]

1, 2, 3 sound about right. You have to be a little more careful about 1 when there are multiple persons (see Rule 13-a). For example, if the SAL is $25k and you have an accident with losses of $1k, $2k, and $30k, then you'd have $28k in limited actual losses. So it's apply SAL, then apply SAL*2 if there are multiple people involved.

Frank

[USTC]

1, 2, 3 sound about right. You have to be a little more careful about 1 when there are multiple persons (see Rule 13-a). For example, if the SAL is $25k and you have an accident with losses of $1k, $2k, and $30k, then you'd have $28k in limited actual losses. So it's apply SAL, then apply SAL*2 if there are multiple people involved.

Frank

So you are saying it is possible for one accident to have mutiple losses but only one person involved so that single SAL,instead of SAL*2, applies?

[USTC]

Bump.

Anyone knows the answer of the following question?

With regard to the disease claim limit, taking Question 24-Exam96, on Page97 Vol 2 of All 10 manual, as an example, why do we use SAL=50,000 instead of the disease formula , i.e. 3*SAL+1.2*E?

[Da Bears!]

Bump.

Anyone knows the answer of the following question?

With regard to the disease claim limit, taking Question 24-Exam96, on Page97 Vol 2 of All 10 manual, as an example, why do we use SAL=50,000 instead of the disease formula , i.e. 3*SAL+1.2*E?

This was a dirty, DIRTY, trick question. If you read the rule, it says something to the effect of a disease claim has to affect at least x-number of people before you apply those special limit rules.

Since this claim only affected one person, it's treated like an ordinary claim :swear:

[Pack Fan]

Bump.

Anyone knows the answer of the following question?

With regard to the disease claim limit, taking Question 24-Exam96, on Page97 Vol 2 of All 10 manual, as an example, why do we use SAL=50,000 instead of the disease formula , i.e. 3*SAL+1.2*E?

In the paragraph right before the disease loss policy limitation it states "Disease losses are subject to per claim and multiple claim limitations. A limitation on total disease losses may also apply to an individulation policy. This is in addition to the claim limitations already applied to individual disease losses under Rule 2-C-13a."