TIA Section A - NAIC SSAPs - SSAP 66

Question 1

What disclosures need to be made about retrospective premium

Answer 1

📊 Method that the insurer uses to estimate retrospective premium adjustments

💲 Amount of NPW that is subject to retrospective rating features

🎦 Whether accrued retrospective premiums are recorded through WP, or as an adjustment to EP

🧮 Calculation of non-admitted retrospective premium

Question 2

Two options to estimate the adjustments to premium based in experience to date

Answer 2

📋 Actuarial accepted methods

📑 Review each retrospectively rated contract individually

Question 3

Four metrics to refer to when deriving the non-admitted balance for accrued retrospective premium

Answer 3

🏄🏼‍♀️ 100% of recoverables from any person for whom any agents balances have been classified as non-admitted

🧾 Retrospective premium adjustments that are not determined and billed/refunded in accordance with the policy provisions

🪅 10% of accrued retrospective premium that is not offset

💸 An amount which is based on certain factors applied to the accrued retrospective premium that is not offset by collateral

Question 4

Formula to determine the non-admitted balance of accrued retrospective premium

Answer 4

🦕The insurer first has to decide between utilizing item C or item D

🦁Non-admitted balance = A + B + insurers selected item from C or D

Question 5

Define a retrospectively rated contract

Answer 5

One in which the final premium is based on the insured’s loss experience during the policy term