California Insurance Code § 11730

The following definitions govern the construction and meaning of the terms used in this article: (a) “Classification system” or “classification” means a plan, system, or arrangement for recognizing differences in exposure to hazards among industries, occupations, or operations of insurance policyholders. (b) “Expenses” means that portion of any rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses, and fees. (c) “Experience rating” means a rating procedure utilizing past insurance experience of the individual policyholder to forecast future losses by measuring the policyholder’s loss experience against the loss experience of policyholders in the same classification to produce a prospective premium credit, debit, or unity modification. (d) “Loss trending” means any procedure for projecting developed losses to the average date of loss for the period during which the policies are to be effective. (e) “Market” means the interaction between buyers and sellers of workers’ compensation insurance within this state pursuant to the provisions of this article. (f) “Pure premium rate” means that portion of the rate which represents the loss cost per unit of exposure, including loss adjustment expense. (g) “Rate” means the cost of insurance per exposure base unit, prior to any application of individual risk variations based on loss or expenses considerations and does not include minimum premiums. (h) “Rating organization” means an entity licensed by the commissioner pursuant to Section 11751.1. (i) “Statistical plan” means the plan, system, or arrangement used in collecting data. (j) “Supplementary rate information” means any manual or plan of rates, classification system, rating schedule, minimum premium, policy fee, rating rule, rating plan, and any other similar information needed to determine the applicable premium for an insured. (k) “Supporting information” means the experience and judgment of the filer and the experience or data of other insurers or organizations relied on by the filer, the interpretation of any statistical data relied on by the filer, descriptions of methods used in making the rates, and any other similar information required to be filed by the commissioner.

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