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Exhibit A <br />Big Independent Cities Excess Program (BICEP) <br />Liability Rating Plan <br />Participation Premium <br />For each Coverage Period, beginning July 1, 2004, a Participation Premium shall <br />calculated for each member. The Members' Participation Premium shall be sufficient <br />pay the Members' Risk Sharing Premium, Insurance Premium and Administrati <br />Premium. The process for calculating each Members' share of these three Premiums <br />set forth in Appendix A-1, Exhibits CA-1 through CA-9, inclusive, and as me <br />specifically set forth below. <br />A. Risk Sharing Premium. As stated in I. above, each Member's <br />Sharing Premium shall be based on the following data for the three <br />beginning four years prior to the Coverage Period for which Particil <br />Premiums are being calculated: <br />1. Reported incurred losses. These are loss payments plus reserves <br />incurred but unpaid claims, as established by BICEP's clai <br />administrator. Only liability claims of the type covered by <br />Memorandum or in accordance with Section 2.1.2 shall <br />considered. <br />2. Number of reported incurred claims exceeding $250,000. <br />3. Workers compensation payroll, as reported to the State <br />California or any other state if a member is domiciled in ano~ <br />state. <br />The above three amounts shall be used to compute an experience <br />modification factor (Xmod) for each Member for the upcoming Coverage <br />Period. <br />Each Member's share of the Risk Sharing Premium shall be the product <br />its: <br />1. Xmod, multiplied by its <br />2. Workers compensation payroll for the year for which Participation <br />Premiums are being calculated, multiplied by <br />C \DOCUments end Seninps`Jasuppon\Local Seninps\Tempoary Imerne~ Files\OLKD4D\BICEP ExhibilA 060205ILiabiliryProgram)(5-10- <br />06)(finap22doc - - <br />A-1 <br />