Some Aspects of the Retrospective and Supplementary Rating Plans [Discussion]

"Retrospective" and "Supplementary rating plans" are similar in that each has for a primary purpose the shifting of part of the risk assumed by the insurance carrier under its policy contract from the insurer to the assured. They differ in the method employed and the degrees to which the risk is shifted. While the provision for expense, particularly for acquisition expense, in the "retrospective" plan frequently differs from the provision in the standard "prospective" rating plan, the method and amount of loading for expense is a wholly distinct problem in no way peculiarly associated with any particular rating plan.