The NCCI 1998 adjustment

[lisa2008]

There is something I suddenly become unsure about just one day before the exam: The NCCI 1998 adjustment makes the primary-excess loss split inflation-sensitive (I assume the adjustment is made to the 1991 single split plan), then how come the primary loss Ap is always limited to $5000? Shouldn't this limit increase each year with inflation?

[Debaser]

It can increase, but it hasn't historically. (I forget which paper says that, maybe someone else can help me out here.)

[UglyChristmasSweater]

Originally Posted by lisa2008

There is something I suddenly become unsure about just one day before the exam: The NCCI 1998 adjustment makes the primary-excess loss split inflation-sensitive (I assume the adjustment is made to the 1991 single split plan), then how come the primary loss Ap is always limited to $5000? Shouldn't this limit increase each year with inflation?

As far as this exam is concerned, it is currently still $5000, but it will increase with inflation in the near future.

[tometom]

Agreed, it hasn't been raised yet. It must be raised in $500 increments, so maybe there hasn't been justification for it to be raised by that much yet. But if I were a betting man, that probably isn't the reason.

[UglyChristmasSweater]

Originally Posted by tometom

Agreed, it hasn't been raised yet. It must be raised in $500 increments, so maybe there hasn't been justification for it to be raised by that much yet. But if I were a betting man, that probably isn't the reason.

great point, I forgot that.