I've seen two different methods for calculating a rate deviation/impact.
ELR = Experience Loss Ratio
PLR = State's permissible loss ratio
Method 1: Deviation/impact = ELR - PLR + 1
Method 2: Deviation/impcat = ELR / PLR
I started thinking maybe Method 1 was required for deviating from a prima facie rate, hence it's more conservative than Method 2. I also considered the possibility that Method 2 can be used unless the state specifically requires Method 1. Are they both right?
Thanks
ELR = Experience Loss Ratio
PLR = State's permissible loss ratio
Method 1: Deviation/impact = ELR - PLR + 1
Method 2: Deviation/impcat = ELR / PLR
I started thinking maybe Method 1 was required for deviating from a prima facie rate, hence it's more conservative than Method 2. I also considered the possibility that Method 2 can be used unless the state specifically requires Method 1. Are they both right?
Thanks
Rate Deviations
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