The Rating Effective Date (RED) appears on a risk’s experience rating worksheet. It is the earliest date that a specific modification is applied to a policy.
The RED may differ from the policy effective date for reasons including, but not limited to:
- Short-term policies
- Cancellations
- Gaps in coverage
- Changes in ownership or combinability status
- Multiple policy effective dates Interstate operations
- A policy that is longer than one year and 16 days
- Late receipt of current policy information by the rating organization
Note: Wrap-up policies are not used to determine the RED.
Rating Effective Date Determination Table
| If the risk is… | Then the rating effective date is… |
|---|---|
| A single policy intrastate or interstate risk, orA multiple policy intrastate or interstate risk with all policies having the same effective date | The effective month and day of the most recent full-term policy in effect and each policy thereafter unless the date is changed due to a reason listed above. |
| A multiple policy intrastate risk with policies having different effective dates | The effective month and day of the most recent full-term policy in effect with the largest amount of estimated standard premium. |
| A multiple policy interstate risk with policies having different effective dates | The effective month and day of the most recent full-term policy in effect for the state with the largest amount of estimated standard premium. |
An experience rating modification will apply for:
- No less than three months, except for those impacted by changes in ownership and combinability status according to Rule 3
- No more than 15 months
- The experience rating modification applies for the full term of the policy if the policy begins on the RED or within three months after the RED.
- If a policy begins more than three months after the RED, the following procedure applies:
- The current experience rating modification applies to the new policy until the date the modification expires.
- A renewal experience rating modification applies to the new policy until the date the policy expires.
- A new RED may be established. Usually, this will be the date 12 months after the effective date of the new policy.
Example:
7/1/19= rating effective date
7/1/20= next rating effective date (policy effective one year)
1/1/20 = new, rewritten policy
1/1/21 = new rating effective date, new mod effective date (policy effective one year)
7/1/20 mod is short termed to expire on 1/1/21, concurrent with new rating effective date
