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Anniversary Rating Date


In some types of insurance that are subject to experience rating, such as workers compensation insurance, the date that governs the application of rates and experience modifiers when a prior policy has been canceled midterm. It prevents either the insured or the insurer from canceling a policy midterm to take advantage of a more favorable rate structure. It also may have application for changes of ownership or combinations of ownership. For an example of how the anniversary rating date applies in the case of a canceled policy, assume a workers compensation policy is written for a 1-year term effective January 1, 2014. It is subsequently canceled and rewritten effective July 1, 2014. The new policy would carry an anniversary rating date of January 1, 2015. The rates effective on 14 July 1, 2014, when the new policy is issued, are those that were effective January 1, 2014, not those that are currently effective. On January 1, 2015, the anniversary rating date, the policy is endorsed to apply the rates and modifier effective January 1, 2015. Then, when the new policy expires July 1, 2015, and is renewed, the anniversary date becomes July 1 and stays that date until some event causes the process to begin all over.

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