CRIS Question and answers already passed Section 6. 1 - Workers Compensation Guaranteed Cost Programs - correct answer ....
__________________ insurance is a common workers compensation insurance rating plan and is often the only option for contractors with relatively low premiums. - correct ...
__________________ insurance is a common workers compensation
insurance rating plan and is often the only option for contractors with relatively
low premiums. - correct answer ✔Guaranteed cost
Guaranteed cost rating is prospective in nature, meaning the premium is
based on .....? - correct answer ✔expected losses and is not subject to
review based on the contractor's actual loss experience during the policy
period.
The final premium determined at the end of the policy period will be adjusted
only to account for any difference between the estimated exposure (estimated
payroll) and the actual exposure (actual payroll), and for midterm rate
changes if they apply to policies already in force.
Guaranteed cost insurance may be affected by? - correct answer ✔- prior
loss experience
- current loss experience of a class of insureds
or..
- the retention by the insured of some part of individual losses in the form of
deductibles.
While guaranteed cost workers compensation insurance premiums are not
sensitive to losses incurred during the current policy period, they are
, ___________________ rated for contractors of any size. - correct answer
✔experience
Consequently, a contractor's losses in the current period can affect the
premium it pays for coverage in future years, since the unmodified premium
for an experience-rated policy is weighted by an "______________" that
reflects how that employer's prior loss experience compares to average loss
experience in that industry. - correct answer ✔"experience modifier"
One of the reasons that guaranteed cost insurance is favored by many
contractors, even some that are large enough to assume substantial risk, is
that the premium for each policy period is .....? - correct answer ✔known in
advance and not subject to change.
Why could there be a sizeable premium increase in the middle of a
construction project using a Guaranteed cost insurance format? - correct
answer ✔the guarantee is only for the policy period, which is unlikely to
correspond with any project schedules.
Advantages of Guaranteed Cost Rating Plans - correct answer ✔- Premium
for the period is fixed, making it easier to include the cost in project bids.
- Poor loss experience does not produce a retroactive premium increase.
- Premium discount is guaranteed.
- Insurer is motivated to be aggressive in the areas of loss control and claims
adjusting.
Disadvantages of Guaranteed Cost Rating Plans - correct answer ✔- No
significant premium savings when losses are low.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Academia199. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
