P&CPennsylvaniahard
A PA WC insurer adopts the PCRB-filed prospective loss costs and applies a 1.45 loss cost multiplier (LCM). Which statement most accurately describes the regulatory status of the resulting rates?
AThe insurer's rates are automatically deemed reasonable and require no further PID review solely because the PCRB prospective loss costs were previously approved by the commissioner
BNo PID filing is required because the PCRB filing covers the insurer
CThe insurer must charge exactly the PCRB advisory rate without an LCM
The PID separately reviews the insurer's LCM filing for compliance with 40 P.S. § 1183 even though loss costs were already approved
Why this is the answer
PCRB files prospective loss costs (pure loss + LAE). To compute final rates, each PA insurer must file its own loss cost multiplier reflecting its expenses, profit, and contingencies. The PID reviews that LCM filing under 40 P.S. § 1183 (excessive/inadequate/unfairly discriminatory), independent of the underlying PCRB approval. There is no automatic deemer based on PCRB adoption.
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