Advisory Loss Costs Are Published By Rating Bureaus
Most insureds will never see these rates as the insurance carriers file deviations to the ALC’s. The deviations are known as Loss Cost Multipliers (LCM’s). The LCM’s are difficult but not impossible to find. The state Departments of Insurance or Workers Compensation Boards almost always agree with the LCM’s published by the insurance carriers.
Rarely, the carriers will actually file lower schedules. Usually, the insurance carriers feel they must have sufficient overhead beyond the ALC’s. I have never seen a state insurance department reject a carrier’s insurance filing to increase the ALC.
California’s Rating Bureau WCIRB refers to them as pure premium rates.
During a recent premium audit that we performed for an insured, we found the filed insurance carrier’s rate to be 211% over the ALC. Ask your insurance agent to include what the state’s ALC’s are for each classification code when you are receiving quotes.
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