residual market load RML

A residual market load is a a factor insurers apply to workers compensation policies to recover costs assessed them by states for deficits in the residual markets.

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Its purpose is to compensate insurers for the losses sustained when writing workers compensation risks in the residual market. It is left to the individual insurer to determine how and whether this cost will be passed on to its policyholders. The most common application is as a cost component included in a retrospective rating plan.