The Association's thirteenth annual actuarial publication, the "1996 Minnesota Ratemaking Report," was mailed to the membership in September. The overall average change in pure premium base rates was a decrease of 24 percent. This decrease included a 10 percent reduction in the rates due to the inclusion of vacation, holiday and sick leave wages. Various relationships among the more recent pure premium and manual rate levels are as follows:

1. Relationship of 1-1-96 pure premium level
to 1-1-95 premium level -15.6%

2. Relationship of 1-1-96 pure premium level
to 2-1-83 (pre-open competition) pure premium level +31.3%

3. Relationship of assigned risk rate level (1-1-96)
to 2-1-83 manual rate level +75.3%

As was customary in the 1984-1995 reports, the new pure premium base rates were derived excluding the following effects:

1. Eighth to ultimate report loss development,

2. Loss ratio trend indications to the midpoint of the experience period,

3. All taxes and assessments such as the Special Compensation Fund assessment,

4. Loss adjustment expenses, and

5. Other company operating expenses.

Carriers were reminded to consider these items when preparing their own individual rate schedules. Calculations demonstrating various alternative approaches to determine the effects of a number of these additional phenomena were provided for carrier information. In addition, an IBM-PC compatible data disk was included with each Report, complete with all class base rates and rating values to assist carriers in ratemaking mechanics.

1991-1995 Change in Pure Premium Base Rate Levels