[I049]

Individual Risk Premium Modification Rating Plan (IRPM)

A program whereby equitable rates or premiums can be developed for large premium package risks by taking into consideration factors likely to affect future losses and expenses. Expense modification is based on the fact that handling costs for large risks may vary from the average. Risk modification recognizes special characteristics, other than those considered in the determination of the basic rate, which would improve the risk. This flexible rating approach, in effect for casualty insurance for many years, was extended to the remaining property and liability lines in 1966.