Schedule Rating Plan

Schedule Rating in Practice: Utilization, Outcomes, and Pricing Precision

Schedule rating provides carriers with limited pricing flexibility by allowing adjustments to loss and/or expense components of premium when certain risk characteristics are not fully reflected in experience or base rates. In Delaware, this flexibility operates within clearly defined statutory and regulatory constraints, including alignment with the DCRB’s Experience Rating Plan.

This report analyzes schedule rating outcomes under both the DCRB plan and independently filed carrier plans for Policy Years 2006–2021, examining utilization, credit and debit behavior, loss ratios, and policy size trends. The findings offer insight into how schedule rating is being applied in practice, how closely adjustments align with indicated results, and what the data suggests about pricing accuracy—particularly as recent Experience Rating Plan changes reshape eligibility and interaction between rating mechanisms.

What’s in the report

• While only about one-quarter of eligible employers utilize schedule rating, these policies account for a majority of total eligible premium, underscoring its significance in carrier pricing practices
• The analysis shows that credits applied in practice are generally higher, and debits lower, than actuarially indicated, suggesting pricing adjustments are often more generous than loss experience alone would support
• Average policy size among participating employers has declined substantially as the program expanded, reflecting increased participation by smaller businesses