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SUPPLEMENTAL EXHIBITS FOR RATE FILINGS

Property/Casualty Rate Filing Exhibits

Exhibit WC - Formation of the Workers' Compensation Deviation Percentage
General Instructions The purpose of this exhibit is the calculation of the statewide Workers' Compensation Deviation Percentage for all class codes combined.
Specific Instructions for Calculations The expense provisions listed on Lines 1 through 5 and the loss adjustment expense provisions on Lines 8 and 9 should be those provisions that underlie your proposed rates (they must be identical to those reported on TDI Exhibit F, Page 2)

Line 12 - Current Average Rate Deviation: show your current average rate deviation from the most recent set of published relativities as a percentage, i.e. - if you apply a factor of 0.70 to the current set of relativities to determine your base rate then enter -30.0%. Note: this factor should be in reference to the relativities in use by your company at the time the filing is made regardless of whether or not the filing is being made in conjunction with the adoption of a revised set of relativities.

Line 13 - Deviation from Relativities Due to Experience and Reforms: provide your own company developed actuarial indication for this factor. To the extent your company´s data is not credible, due consideration must be given to the latest "Analysis of Texas Workers' Compensation Experience" (Currently contained in WC Circular Letter No. 674). Deviation Factors not supported by appropriate actuarial justification and not consistent with the "Analysis of Texas Workers' Compensation" will not be accepted by the department. Note: this factor should be in reference to the relativities in use by your company at the time the filing is made regardless of whether or not the filing is being made in conjunction with the adoption of a revised set of relativities.

Line 15 - If this filing is being made in conjunction with the adoption of a revised set of relativities, enter the off-balance factor resulting from the change based on your book of business. If this filing is being made at any other time, enter 1.000. Note: the off balance = (exposure weighted average class code relativity based on the new relativities) divided by (exposure weighted average class code relativity based on the previous relativities)

Texas Department of Insurance
Property/Casualty Rate Filing Exhibits

Company Name: ____________________________________________

Company NAIC Number: _____________________________________

Company Filing Number: _____________________________________

Line: ______________________________________________________

Page: ___________________________ of: _______________________

 

Exhibit WC - Formation of the Workers' Compensation Deviation Percentage

Expense and Profit Provisions Underlying Your Proposed Rates
(expressed as a percent of Direct Written Premium)
1 Commission and Brokerage Expenses %
2 Other Acquisition Expenses %
3 General Expenses %
4 Taxes, Licenses, and Fees %
5 Profit and Contingencies %
6 Total Expenses and Profit [sum of Lines 1 through 5] %
7 Permissible Loss and LAE Ratio [1.0 - Line 6] %
Loss Adjustment Expense Provisions Underlying Your Proposed Rates
(expressed as a percent of Direct Incurred Loss)
8 Allocated LAE %
9 Unallocated LAE %
10 Total LAE [sum of Lines 8 and 9] %
New Rate Deviation Calculation
(in comparison to the current set of relativities)
11 ELR: Loss and LAE Ratio Underlying the Current Relativities 81.6 %
12 Current Rate Deviation (from your last filing) %
13 Deviation from the Relativities Currently Used Due to Experience and Reforms (as a factor)
14 Deviation from Relativities Due to Differences in Expense Provisions [(11) / (7)]
15 Off-Balance factor created for the adoption of a revised set of relativities
16 Revised Deviation to be Applied to the Relativities [(13) x (14 ) / (15) - 1.0] %
17 Rate Change {[1.0 + (16)] * (15)} / [1.0 + (12)] - 1.0 %

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Last updated: 1/4/2018