Section 120.2. Definitions

The following terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

Act—The Workers’ Compensation Act (

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P. S.

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).

Commissioner—The Insurance Commissioner of the Department.

Department—The Insurance Department of the Commonwealth.

Developed losses—Losses adjusted, using standard actuarial techniques, to recognize the effect of differences between current payment or reserve estimates, or both, and those estimated to be needed to provide actual ultimate loss.

Expenses—The portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses, fees, loss adjustment expenses, other operating expenses and assessments.

Loss trending—A procedure for projecting developed losses to the average date of loss for the period during which the policies are to be effective.

Profit and contingency—The amounts that when considered with net investment and other income, provide an appropriate total after-tax return.

Prospective loss costs—That portion of a rate that does not include provisions for expenses or profit and are based on historical aggregate losses adjusted through development to their ultimate value and projected through trending to a future point in time.

Rate—The rate of premium, policy and membership fee, or other charge made by an insurer for or in connection with a contract or policy of insurance of the kind to which the act applies.

Supplementary rating information—The term includes a manual or plan of rates, classification system, rating schedule, minimum premium policy fee, rating rule, rate-related underwriting rule, experience rating plan, statistical plan and other information needed to determine the applicable rate in effect or to be in effect.