All rules and rates apply to a policy until the next Anniversary Rating Date (ARD). We establish the next anniversary rating date as the date upon expiration of a full one year policy. Example:
ARD Chart
7/1/08 = anniversary rating date
7/1/09 = next anniversary rating date (policy effective one year)
1/1/09 = new, rewritten policy
1/1/10 = new anniversary rating date, new mod effective date (policy effective one year)
1/1/09 policy uses the rates effective 7/1/08 for the period 1/1/09 - 7/1/09
1/1/09 policy uses the rates effective 7/1/09 for the period 7/1/09 - 1/1/10
7/1/09 mod is short termed to expire on 1/1/10, concurrent with new anniversary date
A policy subject to this rule should have attached to it the Anniversary Rating Date Endorsement (WC 00 04 02).
Right and Wrong Examples:
Policy period: 02/01/08 - 02/01/09
Normal ARD: 12/01/07
Next ARD: 02/01/09
Based on Rule 3.A.2 ARD Table 1 of the Basic Manual:
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For a single policy risk whose... |
The insurance carrier must apply... |
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Policies have run consecutively or
The risk is a new entity |
The rates effective on the normal ARD for the full term of:
· The policy beginning on that date or
· Any other policy beginning up to three months after that date
Refer to User's Guide for an example. |
This rule also indicates that the new normal anniversary rating date would be 12 months after the effective date of the new policy (02/01/09). Therefore, the right application of the classification rates are as follows:
The classification rates effective 12/01/07 (normal anniversary rating date) would apply to the full term of the policy, effective from 02/01/08 to 02/01/09.
In Basic Manual Rule 3.A.2 ARD Table 1. In this section it is written:
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Policy has been cancelled & rewritten, either by the same or another carrier within three months after the normal ARD... |
To the rewritten policy, all rules, classifications & rates of the rewriting carrier that were in effect as of the normal ARD:
Until the next ARD has been reached, or
Until the next ARD is established by the rating organization
Refer to User's Guide for an example. |
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Policy has been cancelled & rewritten, either by the same or another carrier more than three months after the normal ARD... |
The rates in effect as of the normal ARD to the new policy until the next normal ARD.
The rates in effect as of the next normal ARD to the new policy until the expiration date of the policy.
The rates in effect as of the new ARD annually thereafter as the new normal ARD. This will be the date that is 12 months after the effective date of the new policy.
Refer to User's Guide for an example. |
In this example, the "next anniversary rating date," would be 02/01/09, based on Part 2.B. of the Experience Rating Plan Manual and Basic Manual Rule 3.A.2, ARD Table 1, paragraph 3. Therefore, classification rates effective 12/01/07 (normal anniversary rating date), would be in effect until 02/1/09 (next anniversary rating date).
An example of a wrong interpretation of the anniversary rating date rule is shown below:
Carrier applies 12/01/08 classification rates to the policy from 02/01/09 to 12/01/09, then as of 12/01/09 to 02/01/10 applies the new classification rates (effective 01/01/09).
NOTE: Basic Manual Rule 3.A.2, ARD Table 1, paragraph 1 does not take the place nor does it invalidate Rule 3.A.2, ARD Table 1, paragraph 2 & 3, it is provided only to supplement the interpretation of the Anniversary Rating Date rule.
Multiple Policy Risk
Reference Experience Rating Plan Manual Rule 2.B.2., Rating Effective Date Determination Table: the ARD is determined by the policy with the "largest amount of estimated standard premium."
The ARD rule 2.B.1. further provides some flexibility by the wording "...unless a different date has been established by the rating organization."