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Retrospective Rating Plans from GMG Insurance

If your company follows best practices and has very few or no liability claims, you might benefit greatly from a retrospective rating plan through GMG Insurance. We know how appealing it is to be rewarded for your excellent reputation and clean claims history and are happy to review your business risk plan and losses to see if a retro plan can help you save on your professional and management liability insurance.

A Variety of Plans

A retrospective rating plan is an endorsement to your main management or professional liability insurance policy that provides a formula for calculating your premium. It uses your guaranteed cost premium as a basis, then adjusts your charges based on your loss history.

A traditional retro plan, also known as an incurred loss retro, typically includes a series of audits after the policy term expires. It uses the claims data discovered in the audits to adjust the premium to what should have been paid. If you perform poorly over the year in question, you will owe the insurer the difference between what was charged and what should have been charged. If your claims are lower than expected and you overpaid, the insurer will reimburse you the difference.

Other retrospective plans, such as retention plans and sliding scale plans, vary some of the rules of the formula, establishing minimum and maximum premiums or adjusting some of the factors so that losses incurred have a greater effect on your premium.

Limitations and Negotiations

Some states restrict the use of retro plans to policies that meet certain premium levels;; therefore, some smaller companies might not be eligible.

If you are eligible and your financial health indicates that a retro is a good fit for your company, you will want to work with GMG Insurance. Negotiating the minimums and maximums you will pay is only part of our job. It’s also important that your policy be worded properly to ensure that the insurer pays claims without regard to what will be owed to it after the term ends in the event you have a bad year. We will find insurers who will compete for your business, and we’ll work hard to get you the best rules on variable parts of the formula.

Retro Rating Plans Available for Workers Comp

A retro plan can also help you with your Workers Compensation premium. Under a retro plan, the initial premium is based on payroll, specific classification codes and premium rates per $100 of payroll. It also takes into account your actual claims experience. The insurance company will use your guaranteed cost premium as a basis, and adjust your premium based on your loss history. If claims are lower than originally anticipated, a refund will be issued. If claims are higher than originally anticipated, an additional premium will be required, up to a maximum premium amount.

We creatively and aggressively find ways for you to save.

Turn to GMG Insurance for personalized attention on managing your assets and securing products that accommodate your lifestyle, now and as it changes over time. Contact us at (215) 497-9240; (800) 540-7900; or email at