On-Level ASAP by Actuarial Services and Programs Calculates adjustment factors to put premiums and losses on today’s cost level.

Purpose of Program Rate and coverage/benefit changes may have occurred between the time coverage was provided and the cost and coverage provided today. Applying adjustment factors to the rates (RLAF), and losses (BLAF) provides a proper comparison of the cost/benefits provided today.

Designed for Use by: Actuaries Experience Analysts Risk Managers Large Accounts Managers

Built-in User Conveniences History of changes are table driven, and program provides for creating and editing these tables. Tables include: List of companies List of programs within each company List of changes for a program File with information on each individual company/program/state/line of business change. Table files with individual rates or relativities (these may be referenced numerous individual change files) Types of changes and variety of policy terms sold modify the level of detail produced and available on exhibits. Tab sequenced through program, with current focus highlighted in yellow. Required steps highlighted and cannot be extinguished until executed, such as saving a file that has been modified.

Program Flexibility includes: User defined companies and programs Individual Risk or Group of Risks adjusted effective dates All Lines of Business & Coverages and allows user to redefine coverages Up to 25 rate or benefit changes over 10 Experience Periods (handles partial or truncated years) Handles a mixture of policy terms of 1, 2, 3, 4, 6, or 12 mos

Program Flexibility (cont.) Calendar, Accident, Policy, or Underwriting Year Experience Periods Handles over lap of a change to all outstanding business on up to 4 prior changes. Handles starting or ceasing to offer a particular policy term during an experience period.

Program Flexibility (cont.) Rate (RLAF) & Benefit (BLAF) On-Level factors by Company, Program, State, and Line of Business Up to 25 revisions applying to either new or outstanding business On Calendar, Accident, Policy or Underwriting Year Experience Periods (including partial or truncated years)

Program Flexibility (cont.) User Labels and decides which exhibits to print. Exhibits include: Experience Periods & Policy Terms Sold History of Changes Cumulative Change Factors Area Under Each Rate Level & Policy Term Includes overlap of change to outstanding by term Average Rate/Benefit Level in Effect On-Level Adjustment Factor The selections, experience, and results of the calculations may be saved to an output file.

Table Changes On-Level In addition to calculating the macro level change for a state, line of business & coverage level, the program will calculate on-level factors and experience for individual tables changes, such as territory base rates, construction/protection classes, and increased limit factors. Here exhibits are sent to a printer, and the information may also be saved to a data file for retrieval in Excel.

Graphic: Policy Year vs Calendar Accident Year

Premium (or Exposure) Definitions Written Premium (WP) Unearned Premium (UEP) Earned Premium (EP) = WP +UEP at start –UEP at end Current Level EP (CLEP) = EP x Rate Level Adjustment Factors (RLAF) Projected EP = CLEP x Trend Factor Program will handle either written or earned premium.

When Will RLAFs Be Needed Change in rate level implemented Change in rating modifier on policy (experience, schedule, retro, etc.) Change in increased limits sold Change in Financial Responsibility Limit Change in Tort Law

Current Level Earned Premium (does not apply to Exposure)

Loss Definitions Case Losses = Paid Losses + Case Reserves Ultimate Losses = Case Losses + IBNR Ultimate L&LAE = Ultimate Losses + Loss Adjustment Expenses Ultimate L&LAE on Level = Ulti. L&LAE x Adjustment to Today’s Benefit Level Project L&LAE = Ulti. L&LAE on Level x Trend Factor

When Will BLAFs Be Needed Common for Workers Compensation to have state revise benefit levels Tort law change Change in limits or deductibles sold under program Coverage expansion for program. Change in Financial Responsibility Limit

Adjusting to Current Benefit Level

Graphic of On-Level Areas

Assumptions Included: Premium/Exposure Losses If Group of policies, then evenly spread throughout the period under each policy term. New and renewal effective dates apply to all policy terms, except for starting or stopping selling a policy term. No Seasonality Each experience period may be of different size. A change to outstanding loss coverage applies on an incurred rather than paid basis.

Model Requirements Visual Basic Program for PC use Need Windows 95 or later Cost: $500.00 for unlimited use of a single copy $400.00 for unlimited use of a second copy And $300.00 for each additional copy. or Annual lease of a single copy for $200.00 per year, $160.00 per year for use of a second copy And $$120.00 for each additional copy. Shipping and handling fee of $5.00 for each CD. Sales within Texas are subject to Texas sales tax.

On-Level ASAP On-Level ASAP is designed, produced & marketed by: R. Stephen Pulis, ACAS, MAAA Actuarial Services and Programs P.O. Box 940327 Houston, TX 77094 (281) 579-2474 ASAP321@aol.com ASAP321@sbcglobal.net www.ACTUARIAL.biz www.Actuary-ASAP.com